Arandom survey of 20 adults coming out of subway stations in new york city revealed that 16 considered owning a car to be of little importance. clearly, 80% of americans don't care much about owning cars."

Answer and Explanation:

This is a faulty comparison conducted. You have asked 20 New York citizens and you are generalizing the answer on the general American people living in different cities and states. The conclusion should have been that 80% of the New York citizens don't care much about owning cars. Although 20 sample size is also less to generalize on the whole of New York population since the city has millions of people living.

OCF = $206,190

Depreciation tax shield = $34,620

Explanation:

The computation of the depreciation tax shield is shown below:

= Depreciation × tax rate

= $115,400 × 30%

= $34,620

And the operating cash flow is

= EBIT + Depreciation - Income tax expense

where,  

EBIT = Sales - cost of good sold - depreciation expense  

= $687,900 - $442,800 - $115,400

= $129,700

And, the income tax expense is

= (Sales - cost of good sold - depreciation expense) × tax rate

= ($687,900 - $442,800 - $115,400) × 30%

= $129,700 × 30%

= $38,910

So, the OCF is

= $129,700 + $115,400 - $38,910

= $206,190