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NEW QUESTION: 1
The following data pertain to Cosmotron Company's financial state as of Dec 31, 1994:
Net Income $400
Increase in inventory $120
Decrease in accounts receivable $45
Increase in payables $165
Depreciatio n$100
Dividends paid$85
Tax rate 30%
What was Cosmotron's operating cash flow in 1994?
A. $590
B. $505
C. $675
D. $490
Answer: A
Explanation:
Explanation/Reference:
Explanation:
In this case, OCF = 400 - 120 + 45 + 165 + 100 = $590. Dividends paid are investing cash flows and not part of OCF. Note that tax rate is not relevant in the indirect method since it has already been factored into in the net income figure.

NEW QUESTION: 2
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