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Sveta_85 [38]
2 years ago
10

A capital investment project has the following expected incremental values next year: Revenue $1,000,000 Operating costs 200,000

Depreciation 300,000 If the income tax rate is 25%, the incremental after-tax operating cash flow is:
Business
1 answer:
sattari [20]2 years ago
5 0

Based on the calculation below, incremental after-tax operating cash flow is $675,000

<h3>How to calculate incremental after-tax operating cash flow</h3>

This can be calculated as follows:

Profit before interest and tax = Revenue - Operating costs – Depreciation = $1,000,000 - $200,000 - $300,000 = $500,000

Operating income = Profit before tax – (Profit before tax * Tax rate) = $500,000 – ($500,000 * 25%) = $375,000

Therefore, we have:

Incremental after-tax operating cash flow = Operating income + Depreciation = $375,000 + $300,000 = $675,000

Learn more about cash flows here: brainly.com/question/18301011.

#SPJ1

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Data from Fontecchio Corporation's most recent balance sheet appear below:
Sonbull [250]

Answer:

the acid test ratio is 0.7 times

Explanation:

The computation of the acid test ratio is shown below;

Acid test ratio is

= Quick assets ÷ current liabilities

= (Cash + marketable securities + account receivable) ÷ current liabilities

= ($37,000 + $39,000 + $97,600) ÷ ($248,000)

= 0.7

Hence, the acid test ratio is 0.7 times

This is the answer but the same is not provided in the given options

4 0
2 years ago
Camille transfers property with a tax basis of $800 and a fair market value of $1,200 to a corporation in exchange for stock wit
Yuki888 [10]

Answer:

$1,100

Explanation:

The computation of the amount realized is shown below:

= Fair market value of exchanged for stock + cash in a transaction - selling expenses incurred

= $850 + $350 - $100

= $1,100

Basically we have added the cash and subtracted the sales expenses to the fair market value so that the correct amount of the realized amount will come in.

4 0
3 years ago
Reporting the details of notes is consistent with which accounting principle that requires financial statements (including footn
alexgriva [62]

Answer:

The correct answer is Option B.

Explanation:

The full disclosure principle is a concept that requires all necessary details relating to the notes to the financial statements are provided and explained in such a way that would be understandable to the users of the financial statements.

The disclosures are expected to be in compliance with the accounting standards, regulatory pronouncements, among others.

6 0
3 years ago
"Dream, Inc., has debt outstanding with a face value of $4 million. The value of the firm if it were entirely financed by equity
Artist 52 [7]

Answer:

expected bankruptcy costs =  $190000

Explanation:

given data

face value = $4 million

equity = $18.6 million

stock outstanding = 510000 shares

sell price = $31 per share

corporate tax rate = 35 percent

to find out

decrease in the value of the company due to expected bankruptcy costs

solution

we get here value of levered firmed by M & M proportion

value of levered firm = value of equity + value of debit

value of levered firm = $18.6 million + 35% ( $4 million)

value of levered firm = $20 million

and

now we get total market value of firm that is

total market value of firm = market value of equity + market value of debit

total market value of firm = $31 ( 510000 ) +  $4 million

total market value of firm = $19810000

so expected bankruptcy costs are here as

expected bankruptcy costs =  $20 million - $19810000

expected bankruptcy costs =  $190000

7 0
3 years ago
Bob holds a portfolio of 20 stocks from different industries, whereas Sharon holds only one stock in her portfolio. Assuming the
nikdorinn [45]

Answer:

The correct answer is: C. larger decrease in total risk.

Explanation:

The risk of an investment portfolio refers to the possibilities of obtaining the return, profit or profit you expect. Every investment involves a risk, and the more you can earn, the greater the risk. If you put your money on a fixed term, the risk is minimal, but it hardly gives you an interest even less than inflation. If you invest in the forex market, for example, you can earn a lot of money, but also the risk (that you do not achieve and even that you lose what you invested) is much greater. Every investor knows that he must assume some risk, because it is something inherent in the investment.

5 0
3 years ago
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