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den301095 [7]
2 years ago
12

If a firm has debit of 40%, a tax rate of 35%, free cash flows of $31, a change in capital expenditures of $20, and a change in

net working capital of $5, what is its depreciation expense?
Business
1 answer:
Pavlova-9 [17]2 years ago
4 0

If a firm has debit of 40%, a tax rate of 35%, free cash flows of $31, a change in capital expenditures of $20, and a change in net working capital of $5, what is its depreciation expense: $30.

<h3>What is the net working capital?</h3>
  • Any asset reasonably expected to be sold, consumed, or expended through regular business operations within the current fiscal year, operational cycle, or financial year is a current asset in accounting.
  • The difference between a company's current assets and current liabilities is known as net working capital. A company's balance sheet is used to calculate net working capital. The more net working capital you have, the more probable your business will be able to pay its present commitments.
  • A business usually has the financial capacity to take care of all of its immediate financial obligations if it has a very high net working capital. In general, a corporation operates more efficiently the bigger its working capital is.
  • Net working capital = current assets (less cash) – current liabilities (less debt)

Free Cash =Operating Cash Flow -Change in capital Expenditures -Change in net Working capital

31 =Operating Cash Flow-20-5

Operating Cash flow =31+20+5 =56

Operating Cash Flow =EBIT*(1-Tax Rate)+Depreciation

Depreciation =Operating Cash Flow - EBIT*(1-Tax Rate) =56-40*(1-35%) =30

If a firm has debit of 40%, a tax rate of 35%, free cash flows of $31, a change in capital expenditures of $20, and a change in net working capital of $5, what is its depreciation expense: $30.

To learn more about net working capital, refer to:

brainly.com/question/26214959

#SPJ4

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3 0
3 years ago
BRAINLIEST
Marina CMI [18]

Answer:

B

Explanation:

4 0
3 years ago
Firms may invest in fewer projects as a result of A. an increase in interest rates that increase economic growth. B. an increase
kupik [55]

Answer: B. an increase in interest rates that decrease economic growth.

Explanation:

If interest rates were to rise in an Economy, that would mean that the cost of borrowing just rose. The rise in the Cost of Borrowing reduces consumer spending as well as business investment. This will therefore lead to a lower Aggregate demand. A lower AD in the Economy usually leads to a decrease in economic growth.

Now, if such things were to happen, a firm may definitely invest in fewer projects because first off it will be more expensive for them to borrow and invest because of the high rates. They will also be discouraged because of the Decrease in economic growth as the chances of their projects doing well will be drop in a depreciating economy.

7 0
3 years ago
True or false: A flexible budget reporting sales volumes at three different levels will have the same fixed costs.
lapo4ka [179]

Answer:

True

Explanation:

A flexible budget is a budget in which you modify the activity levels to reflect changes in sales to help the company adjusts to different circumstances that may occcur. Also, in this budget the fixed costs remain constant and the variable costs change with the activity levels. According to this, the answer is that the statement that says that a flexible budget reporting sales volumes at three different levels will have the same fixed costs is true.

5 0
3 years ago
Which of the following items may be a good consideration in selecting a bank? I. The bank sends a representative to the local ma
wolverine [178]

The good consideration while selecting a bank includes:

  • number of near ATMs or bank branches.
  • knowledge of personal usage habits and needs.

<h3>What is meant by good consideration?</h3>

The consideration here means the act of assessing the favorable condition over unfavorable condition while trying to select a bank.

So, the good consideration while selecting a bank includes number of near ATMs or bank branches and knowledge of personal usage habits and needs.

Therefore, the Option B is correct.

Read more about Bank consideration

<em>brainly.com/question/13834098</em>

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