Answer:
$7,634
Explanation:
The computation of the operating cash flow is shown below:
= EBIT + Depreciation - Income tax expense
where,
EBIT = Sales - cost of good sold - depreciation expense
= $19,740 - $9,290 - $1,960
= $8,490
The income tax expense equal to
= (Sales - cost of good sold - depreciation expense - interest expense) × tax rate
= ($19,740 - $9,290 - $1,960 - $1,450) × 40%
= $2,816
So, the operating cash flow is
= $8,490 + $1,960 - $2,816
= $7,634
