A proposed new project has projected sales of $95,200, costs of $48,160, and depreciation of $3,360. The tax rate is 22 percent. Calculate operating cash flow using the four different approaches. The EBIT approach

Approach 1

“EBIT + Depreciation – Taxes” approach:  

EBIT = Sales – Cost – Depreciation = $95,200 - $48,160 - $3,360 = $43,680

Tax = EBIT × Tax rate = $43,680 × 0.22 = $9,607

EBIT + Depreciation – Taxes = $43,680 + $3,360  - $9,607 = $37,433

Approach 2

Top-down approach = Sales – Cost – Tax  

= $95,200 - $48,160 - $9,607

= $37,433

Approach 3

Tax-shield approach = (Sales – Cost) (1 – tax rate) + (Depreciation × tax rate)  

= ($95,200 - $48,160) (1 – 0.22) + ($3,360  × 0.22)

= $36691.2 + $739.2  

= $37430.4

Approach 4

Bottom-up approach = (Sales – Cost – Depreciation) (1 – tax rate) + Depreciation

= ($95,200 - $48,160 - $3,360 ) (1 – 0.22) + $3,360    

= $34,070.4 + $$3,360

= $37,430.4

hi.

i'm not sure about the answer, but, i would say c. *when the recipient was not included on the original email.*

hope this , well if it's right. uwu

merry christmas! ^-^

lbc corporation makes and sells a product called product wz. each unit of product wz requires 4.1 hours of direct labor at the rate of $20.00 per direct labor-hour. management would like you to prepare a direct labor budget for june. the company plans to sell 28,000 units of product wz in june. the finished goods inventories o