Problem:
A proposed new project has projected sales of $127,000, costs of $61,000, and depreciation of $13,000. The tax rate is 34 percent.
Required:
Question: Calculate operating cash flow using the four different approaches.
Approaches Operating cash flow
1) EBIT + Depreciation - Taxes$ =?
2) Top-down$ =?
3) Tax-shield$ =?
4) Bottom-up$ =?