During 2019, Rainbow Umbrella Corp. had sales of $630,000. Cost of goods sold, administrative and selling expenses,
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During 2019, Rainbow Umbrella Corp. had sales of $630,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $465,000, $85,000, and $135,000, respectively. In addition, the company had an interest expense of $70,000 and a tax rate of 21 percent. (Assume that interest is fully deductible.)
a. What is the company’s net income for 2019?
b. What is its operating cash flow?
c. Explain your results in (a) and (b).
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Related Book For
Corporate Finance
ISBN: 978-1259918940
12th edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan
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