Shelley's Quilt Shop has annual sales of $682,000 and a profit margin of 6%. The annual depreciation expense is $43,001. What is the amount of the operating cash flow if Jenny's has no long-term debt?

A) -$2,080
B) $36,260
C) $38,340
D) $40,920
E) $83,920

Question

Lorénzo Richards · Accepted Answer

Final Answer : E, Explanation :  Operating cash flow is calculated as net income plus depreciation. Net income is sales multiplied by the profit margin, which is $682,000 * 6% = $40,920. Adding the depreciation expense of $43,001 gives an operating cash flow of $83,921, which rounds to $83,920.

Shelley's Quilt Shop has annual sales of $682,000 and a profit margin of 6%. The annual depreciation expense is $43,001. What is the amount of the operating cash flow if Jenny's has no long-term debt?

A) -$2,080
B) $36,260
C) $38,340
D) $40,920
E) $83,920

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Shelley's Quilt Shop has annual sales of $682,000 and a profit margin of 6%. The annual depreciation expense is $43,001. What is the amount of the operating cash flow if Jenny's has no long-term debt?A) -$2,080B) $36,260C) $38,340D) $40,920E) $83,920

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Learning Objectives

Learning Objectives

Related questions

Shelley's Quilt Shop has annual sales of $682,000 and a profit margin of 6%. The annual depreciation expense is $43,001. What is the amount of the operating cash flow if Jenny's has no long-term debt?

A) -$2,080
B) $36,260
C) $38,340
D) $40,920
E) $83,920