Sales revenue is amount generated by the firm through sale of goods or services. It is used to measure the size of the business. Sales revenue = [ Net income + Taxes + Operating expenses + Depreciation ] Net cashflow refers to the change in the firm’s cash balance as indicated in the cash flow statement. It is commonly used to evaluate the cash flow balances in the firm. The following is the general formula used to calculate the net cash flow. Net cashflow = Net income + Depreciation HTW’s net income was $240,000; depreciation was $100,000; and operating expenses were $500,000 before including depreciation. The tax rate is 40%.

Question

HighTech Wireless just published its current income statement, which shows net income equal to $240,000. The statement also shows that operating expenses were $500,000 before including depreciation, depreciation was $100,000, and the tax rate was 40 percent. If HighTech has no debt, what were its sales revenues? What was its net cash flow?

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Question

Chapter 2, Problem 6PROB

Summary Introduction

Sales revenue is amount generated by the firm through sale of goods or services. It is used to measure the size of the business.

Sales revenue=[Net income+Taxes+Operating expenses+Depreciation]

Net cashflow refers to the change in the firm’s cash balance as indicated in the cash flow statement. It is commonly used to evaluate the cash flow balances in the firm. The following is the general formula used to calculate the net cash flow.

Net cashflow=Net income+Depreciation

HTW’s net income was $240,000; depreciation was $100,000; and operating expenses were $500,000 before including depreciation. The tax rate is 40%.

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