Loose Leaf for Foundations of Financial Management Format: Loose-leaf
17th Edition
ISBN: 9781260464924
Author: BLOCK
Publisher: Mcgraw Hill Publishers
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Chapter 12, Problem 1P
Assume a corporation has earnings before depreciation and taxes of
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Assume a corporation has earnings before depreciation and taxes of $82,000, depreciation of $45,000, and that it has a 25% combined tax bracket. What are the after-tax cash flows for the company?
Use the following to determine FCF (Free Cash Flow) for the current year. Assume an effective tax rate of 25%:
Revenue
COGS (Cost of Goods Sold)
Gross Profit
Wages Expense
Rent and Other Occupancy Expense
Depreciation Expense
Operating Income
Current Assets
Accounts Receivable
Inventory
Total Current Assets
Gross Fixed Assets (at historical cost)
less: Accumulated Depreciation
Net Fixed Assets
Total Assets
Current Year
100,000
67,000
11,500
15,000
1,000
8,500
5,500
50,000
30,000
20,000
Prior Year
4,200
950
8,200
6,000
46,000
29,000
17,000
Current Liabilities
Accounts Payable
Wages Payable
Enter your answer as a monetary amount rounded to four decimal places, but without the currency symbol. For example, if your answer is $90.1234, enter 90.1234. Show a
decrease as a negative figure.
Type your answer...
4,500
900
Use the following information to build an income statement and answer the following question:
Sales of $760,000, current assets of $5,400,000 net fixed assets of $28,100,000, and long-term debt of $10,600,000, costs of $316,000,
depreciation expense of $39,000, interest expense of $34,000, current liabilities of $4,100,000, and a tax rate of 21 percent. The firm paid
out $150,000 in cash dividends and has 100,000 shares of common stock outstanding.
What is the addition to retained earnings?
O $143,090
O $140,000
O $145,050
O $153,000
Chapter 12 Solutions
Loose Leaf for Foundations of Financial Management Format: Loose-leaf
Ch. 12 - Prob. 1DQCh. 12 - Why does capital budgeting rely on analysis of...Ch. 12 - Prob. 3DQCh. 12 - Prob. 4DQCh. 12 - What does the term mutually exclusive investments...Ch. 12 - Prob. 6DQCh. 12 - If a corporation has projects that will earn more...Ch. 12 - What is the net present value profile? What three...Ch. 12 - How does an asset’s ADR (asset depreciation...Ch. 12 - Assume a corporation has earnings before...
Ch. 12 - Assume a corporation has earnings before...Ch. 12 - Assume a firm has earnings before depreciation and...Ch. 12 - Assume a firm has earnings before depreciation and...Ch. 12 - Al Quick, the president of a New York Stock...Ch. 12 - Prob. 6PCh. 12 - Prob. 7PCh. 12 - Assume a 90,000 investment and the following cash...Ch. 12 - Prob. 9PCh. 12 - X-treme Vitamin Company is considering two...Ch. 12 - You buy a new piece of equipment for 16,230, and...Ch. 12 - Prob. 12PCh. 12 - Home Security Systems is analyzing the purchase of...Ch. 12 - Aerospace Dynamics will invest 110,000 in a...Ch. 12 - The Horizon Company will invest 60,000 in a...Ch. 12 - Skyline Corp. will invest 130,000 in a project...Ch. 12 - The Hudson Corporation makes an investment of ...Ch. 12 - The Pan American Bottling Co. is considering the...Ch. 12 - You are asked to evaluate the following two...Ch. 12 - Turner Video will invest 76,344 in a project. The...Ch. 12 - The Suboptimal Glass Company uses a process of...Ch. 12 - Keller Construction is considering two new...Ch. 12 - Davis Chili Company is considering an investment...Ch. 12 - Telstar Communications is going to purchase an...Ch. 12 - Assume 65,000 is going to be invested in each of...Ch. 12 - The Summit Petroleum Corporation will purchase an...Ch. 12 - Oregon Forest Products will acquire new equipment...Ch. 12 - Universal Electronics is considering the purchase...Ch. 12 - Prob. 30PCh. 12 - Prob. 31PCh. 12 - Prob. 32PCh. 12 - Hercules Exercise Equipment Co. purchased a...Ch. 12 - Prob. 2WECh. 12 - Returning to TXN’s summary page, record the...
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- Calculate the Free Cash Flow for Polaris. Item EBITDA Depreciation Tax Rate, T Current Assets Current Liabilities CAPEX Polaris Inc. Selected Financial Information ($000's) Year 0 19,324 17,147 Year 1 10,000 1,188 31% 15,520 15,823 2,078arrow_forwardHammett, Inc., has sales of $74,058, costs of $24,908, depreciation expense of $6,308, and interest expense of $1,766. If the tax rate is 31 percent, what is the operating cash flow, or OCF?arrow_forwardAssume a corporation has earnings before depreciation and taxes of $126,000, depreciation of $42,000 and that it is in a 35 percent tax bracket. Compute its cash flow using the following format. (Input all answers as positive values.) C 500 Earnings before depreciation and taxes Depreciation Earnings before taxes Taxes Earnings after taxes Depreciation Cash flow $ $ 0 0 0 Prev 1 of 9 *** MacBook Air Next >arrow_forward
- Your firm has the following income statement items: sales of $52,000,000; income tax of $1,880,000; operating expenses of $9,000,000; cost of goods sold of $36,000,000; depreciation and amortization of $1,500,000; and interest expense of $800,000. For purposes of determining free cash flow, what is the amount of the firm's after-tax cash flow from operations? O $750,000 O $3,600,000 O $1,008,000 O $5,120,00Oarrow_forwardPrepare a cash flow analysis which includes:  1.the initial investment,  2. the annual after-tax operating cash flows, and  3.the terminal year non-operating cash flow in year 5.arrow_forwardHailey, Inc., has sales of $19,580, costs of $9,450, depreciation expense of $2,120, and interest expense of $1,610. Assume the tax rate is 40 percent. What is the operating cash flowarrow_forward
- From the following information for BlueInks Corporation, compute the rate of return on assets. Hint: The numerator is income before interest expense and taxes. Net income $40,878 Total assets at beginning of year $250,100 Total assets at end of year $158,680 a. 15% b. 25% c. 16% d. 20%arrow_forwardAssume a corportation has earnings before depreciation and taxes of $100,000, depreciation of $50,000, and is in a 30% percent tax bracket. Compute its cash flow using the format.  Earnings before depreciation and taxes  Depreciation                             Earnings before taxes                      Taxes @ 30%                              Earnings after taxes     Depreciation 2a) In problem 1 , how much would cash flow be if there were only $10,000 in depreciation ? All other factors are the same. 2b) How much cash flow is lost due to the reduced depreciation between Problems 1 and 2a?arrow_forwardBronze, Inc has sales of $58,200, costs of $25,300, depreciation expense of $3,100, and interest expense of $4,400. If the tax rate is 21 percent, what is the operating cash flow?arrow_forward
- Use the information provided below to prepare the Cash Flow Statement of Alto Limited for the year ended 31 December 2022. INFORMATION The following amounts were obtained from the Statement of Comprehensive Income for the year ended 31 December 2022 and Statement of Financial Position of Alto Limited as at 31 December 2022 and 31 December 2021: Sales Cost of sales Depreciation Operating profit Interest expense Company tax for the year Property, plant and equipment (carrying value) Long-term investments Inventories Accounts receivable Prepaid expenses Cash and cash equivalents Ordinary share capital (All shares issued at R10 each) Retained earnings Non-current liabilities Accounts payable Accrued expenses Dividends payable Company tax payable 31 Dec 2022 R 11 000 000 6 500 000 750 000 1 650 000 450 000 400 000 6 250 000 350 000 2 150 000 1 700 000 200 000 500 000 3 100 000 3 000 000 3 600 000 1 100 000 100 000 200 000 50 000 31 Dec 2021 R Note: ■Dividends paid and recommended during…arrow_forwardUse the relevant information contained in the Cash Flow and Income Statement Tabs. Compute the Net Free Cash Flow to Invested Capital for the year 2022. State as a whole number and round to the second decimal place. (i.e. $12,987.654 would be written as 12,987.65). Assume the appropriate tax rate to compute NOPAT is 27%.arrow_forwardconsider a company with sales of $18,000.0 million, cost of goods sold of 42% of sales, other expenses including salaries ( we usually call this SG&A for selling, general and administrative) of 1750.0million, depreciation of 2250.0 million, and interest expense of 2300 million. tax rate =21%. a. generate an income statement and show net income b. what is the company's operating cash flow? c. if there are 775.2 million shares outstanding, what is the EPS? d. if the company has a payout ratio of 20%, what is the dividends per share?arrow_forward
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