Assume a corporation has earnings before depreciation and taxes of $110,000, depreciation of $48,000, and that it has a 30 percent tax bracket. a. Compute its cash flow using the following format. Earnings before depreciation and taxes Depreciation Earnings before taxes Taxes Earnings after taxes Depreciation Cash flow b. How much would cash flow be if there were only $16,000 in depreciation? All other factors are the same. Cash flow c. How much cash flow is lost due to the reduced depreciation from $48,000 to $16,000? Cash flow lost

Assume a corporation has earnings before depreciation and taxes of $110,000, depreciation of $48,000, and that it has a 30 percent tax bracket. a. Compute its cash flow using the following format. Earnings before depreciation and taxes Depreciation Earnings before taxes Taxes Earnings after taxes Depreciation Cash flow b. How much would cash flow be if there were only $16,000 in depreciation? All other factors are the same. Cash flow c. How much cash flow is lost due to the reduced depreciation from $48,000 to $16,000? Cash flow lost

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Please answer Part B and C. The following are answers from previous questions in case you need the below information. Operating Cash Flow: Operating Cash Flow (OCF)= Net Income + Depreciation – Increase in Working Capital. OCF=419,573+11,751-110,249= 321,075 Net Capital Spending: Net capital expenditures (NCE) = Fixed asset (current period) - Fixed asset (prior period) + depreciation (current period) NCE=258,251-261,779+11,751 =8,223 iii. Change in Net Working Capital Net Working Capital (NWC)= Current assets- current Liabilities Year 2019 : NWC =421,609-148,087 =273,522 Year 2020 : NMW= 550,572-166,801 =383,771 Change in Net Working Capital = 383,771-273,522=110,249 Sl.NO PARTICULARS AMOUNT EBIT + DEPRECIATION - TAXES = 597976+11751-178055= $ 431,672 ii] NET CAPITAL SPENDING: ENDING NET FIXED ASSETS - BEGINNING NET FIXED ASSETS + DEPRECIATION = 258251-261779+11751= $ 8223 iii] CHANGE IN NET WORKING…
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1. Calculate the following values for the company for the year ending in 20x9. Present evidence of all your calculations.a. NOPAT - Net Operating Profit after Taxesb. OCF - Operating Cash Flowc. FCF - Free Cash Flow2. Discuss what meaning each of the measures calculated in the previous question has, both for management and for investors and creditors, among other constituents.3. What is the main cause of the differences that exist between the company's earnings and the cash flows of the same evaluated period?
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Which of the following is a section of a cash flow statement? Select one: a.Fixed costs outflows b.Cash basis accounting systems c.Wage taxes d.EIN Question 22 Question text If you invest $1,525,000 in a business and earn a return of $775,000, what is your ROI? Select one: a.42% b.45% c.51% d.1.96% Question 23 Question text If Jacques invests $20,000 at 10% interest for 3 years, what will the future value of the money be? Select one: a.$26,620.00 b.$6620.00 c.$20,606.02 d.$26,000.00 Question 24 Question text Two common risks to cash flow stability are ________ and ________. Select one: a.credit squeeze; burn rate b.surplus inventory; pilferage c.burn rate; pilferage d.surplus inventory; credit squeeze Question 25 Question text A suggested allowance for contingencies and emergencies at start-up is _____ of estimated start-up costs. Select one: a.5 percent b.10 percent c.25 percent d.40 percent
a. Explain Cash Flow Statement, what are different cash flow classifications, define and differentiate with examples. 3 b. XYZ, Inc., has Total Assets equal to your $ ID, total assets turnover is 1.5, and D/E ratio of 1.5. If its Return to equity ratio is 20 percent, what is its net income? 7
TJ Industries has revenue of $400,000 and expenses of $250,000. The depreciation cost is $80,000 and marginal tax rate is 35%. Calculate cash flow from operation. Group of answer choices a.$150,000 b.$45,500 c.$125, 500 d.$135,000
Finding operating and free cash flows Consider the balance sheets and selected data from the income statement of Keith Corporation that follow. a. Calculate the firm's net operating profit after taxes (NOPAT) for this year. b. Calculate the firm's operating cash flow (OCF) for the year. c. Calculate the firm's free cash flow (FCF) for the year. d. Interpret, compare and contrast your cash flow estimate in parts (b) and (c). Data table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Assets Cash Marketable securities Accounts receivable Inventories Total current assets Gross fixed assets Less: Accumulated depreciation Net fixed assets Total assets Liabilities and Stockholders' Equity Accounts payable Notes payable Accruals Keith Corporation Balance Sheets Total current liabilities Long-term debt Total liabilities Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity December 31 Income…
Given the following information calculate the relevant annual Net Cash Flow After Tax [NCFAT], needed to calculate NPV. Forecast Annual Income $ Cash Revenue 360,000 Less Cash Operating Expenses 160,000 Admin Cash Flow Expenditure 60,000 Depreciation 36,000 Interest 24,000 Net Profit Before Tax Tax @30% 24,000 Net Profit After Tax 56,000
The Rogers Corporation has a gross profit of $704,000 and $343,000 in depreciation expense. The Evans Corporation also has $704,000 in gross profit, with $47,300 in depreciation expense. Selling and administrative expense is $191,000 for each company. a. Given that the tax rate is 40 percent, compute the cash flow for both companies Cash Flow Rogers= Cash Flow Evans= b. Calculate the difference in cash flow between the two firms
Make sure you provide complete answers, and show your work with calculation problems Given the following information, calculate the Net Free Cash Flow. Net income = $25,000; Capital expenditures = $4,000; Cash dividends paid to shareholders = $2,500; Repayment of Long-term debt = $1,500; Depreciation, Depletion & Amortization = $5,000; Increase in current assets = $250; Increase in current liabilities = $750;

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