Thaler & Co

question 63

Multiple Choice

Thaler & Co.anticipates an increase of $1,000,0000 in Net Operating Income from first year sales of a new product.Taxes will be $350,000 and the company took $150,000 in depreciation expense.Operating cash flow equals

• A)$1,000,000
• B)$500,000
• C)$800,000
• D)$650,000

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Definitions:

Double Taxation

The financial imposition where income taxes are paid twice on the same source of earned income, often in the context of corporate profits taxed both at the corporate level and again when distributed as dividends.

Independent Contractors

Workers who provide services to a business under terms specified in a contract, rather than as employees.

Licensing

A process where a company allows another to use its intellectual property or technology in exchange for a fee or royalty.

Royalties

A share of the income of a business paid by a franchisee to the franchisor.