Thaler & Co. anticipates an increase of $1,000,000 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

Operating cash flow can be calculated as follows:
Operating Cash Flow = Net Operating Income + Depreciation Expense - Taxes
= $1,000,000 + $150,000 - $350,000
= $800,000