Al's Bistro is considering a project which will produce sales of $23,000 and increase cash expenses by $13,000. If the project is implemented, taxes will increase from $25,000 to $27,500 and depreciation will increase from $5,000 to $8,000. What is the amount of the operating cash flow using the top-down approach?

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Q: OCF

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A: Following is the answer to the question

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.