Question

1 Fill in the missing numbers for the following income statement Do not found intermediate calculations.) Sales $ Costs 563 800 425 700 1012 Depreciation GOK Taxes (21 %) ences Net income b. Calculate the OCF (Do not round intermediate calculations.) c. What is the depreciation tax shield (Do not round intermediate calculations.) b. OCF C. Depreciation as shield

Answer 1

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

11 . A B C Sales Costs Depreciation EBIT Taxes(21%) Net Income $663,800 $425,700 $101,300 $136,800 $28,728 $108,072 8 9 b. Operating Cash Flow (OCF) Depreciation tax shield $209,372 $21,273 10 c. 11 12

Cell reference -

Sales Costs Depreciation EBIT Taxes(21%) Net Income 663800 425700 101300 =C2-C3-C4 =C5*0.21 =C5-C6 9 b. 10 C. 11 Operating Cash Flow (OCF) Depreciation tax shield =C7+C4 =C4*0.21 17

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