The Monley Corporation of New Jersey has gross profits of $980,000 and $260,000 in depreciation expense. The Majors Corporation of Nebraska also has $980,000 in gross profit, with $60,000 in depreciation expense. Selling and administrative expense is $120,000 for each company.

Question

The Monley Corporation of New Jersey has gross profits of $980,000 and $260,000 in depreciation expense.  The Majors Corporation of Nebraska also has $980,000 in gross profit, with $60,000 in depreciation expense. Selling and administrative expense is $120,000 for each company.

Compute the cash flow for both companies with a tax rate of 40%. Explain the difference in cash flow between the two firms.

THIS IS THE CHART I MUST FILL IN.

Gross profit      
Selling and admin expense         Depreciation                            Operating profit
Taxes
Earnings after tax
Plus depreciation expense                           
Cash Flow