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den301095 [7]
1 year 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]1 year 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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Answer:

product differentiation

Explanation:

A product differentiation strategy focuses on distinguishing your company's products or services from the competition. The company must add meaningful and valued differences that will distinguish our product or service in order for our customers to view them as different or better. The goal of a differentiation strategy is to gain a competitive advantage since customers associate differentiated products to higher quality products.

7 0
2 years ago
When parents or eligible students request inspection and review of education records, federal law stipulates that the requested
zloy xaker [14]

The period of time that is requested for inspection and review of education records, according to federal law is 45 days.

<h3>What is an education records review?</h3>

This is a review of the academic standing of a student. The reason why the review is needed is probably because the student wants to apply for a new school.

According to federal law, when the request is received, the records must be provided within 45 days.

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8 0
2 years ago
Which statement is not correct about the business-society interdependence?
Dmitry_Shevchenko [17]

Answer:

D. Actions by governments rarely significantly affect business

Explanation:

Business-socciety interdependence points out how business activities impact society and how society impacts business decisions. Government actions play a significant role in business performance. For example, an increase in interest rate increases the cost of borrowing and acts as an investment disncentive. Likewise, an increase in corporation tax stifles the incentive to invest and reduces corporate profit. Other government interventions such as standards and regulations, minumum wage legislations, permits and licenses would not only reduce business profits but could make doing business very cumbersome. Also, the extent to which the government is committed to maintaining political stability could determine the extent to which invesmtent thrives in an economy.

6 0
3 years ago
Which is the main force behind the decisions made by producers in a free-market society?
marysya [2.9K]
The profit motive

Hope this helped!
STSN
7 0
3 years ago
Read 2 more answers
The company cost of capital for a firm with a 60/30/10 debt/common/preferred split, 8% cost of debt, 15% cost of equity, preferr
sveticcg [70]

Answer:

b. 8.82%

Explanation:

WACC = Cost of equity x Weight of equity + Cost of Preferred Stock x Weight of Preferred Stock + Cost of Debt x Weight of Debt

Cost of Preferred Stock calculation :

Cost of Preferred Stock = Expected dividend / Market Price x 100

                                        = $6 / $50 x 100

                                        = 12 %

After tax cost of debt calculation :

After tax cost of debt = Interest x (1 - tax rate)

                                    = 8 % x (1 - 0.35)

                                    = 5.20 %

therefore,

WACC = 15% x 30 % + 12 % x 10 %+ 5.20 % x 60 %

           = 8.82 %

6 0
2 years ago
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