Thaler & Co.anticipates an increase of $1,000,0000 in Net Operating Income from first year sales of a new product.Taxes will be $350,000 and the company took $150,000 in depreciation expense.Operating cash flow equals
A)$1,000,000
B)$500,000
C)$800,000
D)$650,000

Question

Quizplus · Accepted Answer

The formula for calculating operating cash flow is as follows:

Operating Cash Flow = Net Operating Income + Depreciation - Taxes

Given the information in the problem, we can plug in the numbers:

Operating Cash Flow = $1,000,000 + $150,000 - $350,000
Operating Cash Flow = $800,000

Therefore, the correct choice is C, as it represents the calculated operating cash flow.