Net Income and OCF During 2007, Raines Umbrella Corp. had sales of $840,000. Cost of goods sold,
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Net Income and OCF During 2007, Raines Umbrella Corp. had sales of $840,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $625,000, $120,000, and $130,000, respectively. In addition, the company had an interest expense of $85,000 and a tax rate of 35 percent. (Ignore any tax loss carry-back or carry forward provisions.)
a. What is Raines’s net income for 2007?
b. What is its operating cash flow?
c. Explain your results in (a) and (b).
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b OCF EBIT Depreciation Taxes 35000 130000 0 95000 c Net income was negative because of the ta...View the full answer
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Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0077861629
8th Edition
Authors: Stephen A. Ross, Randolph W. Westerfield, Bradford D.Jordan
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