During 2002, Lambert Limo Corp. had sales of $900,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $600,000, $170,000, and $105,000, 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 Lambert’s net income for 2002?

b. What is its operating cash flow?

c. Explain your results in (a) and (b).