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Tubby Toys estimates that its new line of rubber ducks will generate sales of $7.10 million, operating costs of $4.10 million, and a depreciation...
Tubby Toys estimates that its new line of rubber ducks will generate sales of $7.10 million, operating costs of $4.10 million, and a depreciation expense of $1.10 million. Assume the tax rate is 40%.
a.Calculate the operating cash flow for the year by using all three methods: (a) adjusted accounting profits; (b) cash inflow/cash outflow analysis; and (c) the depreciation tax shield approach. (Enter your answers in millions rounded to 2 decimal places.)
MethodCash Flow Adjusted accounting profits$ million Cash inflow/cash outflow analysis million Depreciation tax shield approach million
b.Are the above answers equal?
Yes/No
