Question: Given the financial data for New Electronic World, Inc. (NEW), compute the following measures of cash flows for the NEW for the year ended December

Given the financial data for New Electronic World, Inc. (NEW), compute the following

measures of cash flows for the NEW for the year ended December 31, 2005

(a) Operating Cash Flow.

(b) Free Cash Flow.

Answer:

(a) OCF

=

EBIT

-

Taxes

+

Depreciation

OCF

=

$30,000

-

$8,000

+

$3,000

=

$35,000

how we get $35000

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