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Marysya12 [62]
2 years ago
7

Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $2,422,431.

The fixed asset will be depreciated straight-line to zero over its 3-year tax life, after which time it will be worthless. The project is estimated to generate $1,950,026 in annual sales, with costs of $1,675,501. If the tax rate is 0.36 , what is the OCF for this project?
Business
1 answer:
mylen [45]2 years ago
3 0

The Operating Cash Flow(OCF) is $466,387.72 for this project.

<h3>Why is operating activity most important?</h3>

Due to its direct connection to the company's core business activities, such as sales, distribution, production, and so forth, operating activities account for the majority of the company's cash flows. These activities also determine the profitability of the company, and items falling under this heading are the main types of cash flows.

Given,

Fixed Asset = $2,422.31

Sales = $1,950,026

Cost = $1,675,501

Tax-rate = 0.36

Required to Calculate Operating Cash Flow(OCF) = (Sale - Cost - Deprecaition) x (1-tax) + Deprecaition

OCF = ($1,950,026 - $1,675,501 - $2,422,431/3) x (1 - 0.36) + $807,477

OCF = $466,387.72

Thus, All of the money that is made by a company's primary business operations is considered operating cash flow. All capital asset acquisitions and investments in other business endeavors are included in investing cash flow. The company's payments as well as all proceeds from the issuance of debt and stock are included in the financing cash flow. The Operating Cash Flow(OCF) is $466,387.72 for this project.

Learn more about Operating Cash Flow here:

brainly.com/question/17001006

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Answer:

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Digital rectal examination (DRE): The physician inserts a gloved finger into the rectum (located next to the prostate) and feels the back of the prostate. Prostate cancers can sometimes be detected as lumps or bumps on the prostate here.

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7 0
4 years ago
Asymmetric information occurs when A. everyone has the same information. B. people engaging in a transaction are uncertain about
melisa1 [442]

Answer:

Option (D) is correct.

Explanation:

Asymmetric information occurs in a situation in which one of the two parties involved in a particular transaction have more information than the other party. This problem mostly occurs in a health insurance market where the a person to be insured have more information about his health than the insurance company.

Asymmetric information will result in two problems are as follows:

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3 years ago
In the multiplex industry, Vibrant Movies Inc. is an upscale multiplex that focuses on superior customer experience. The firm ch
Rudiy27

Answer:

True movies is pursuing an integration strategy.

Explanation:

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5 0
3 years ago
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Department D had materials costs of $10,000 in beginning work in process inventory and added an additional $50,000 in materials
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Answer:

$3

Explanation:

Cost per Equivalent Unit =Total materials costs/EUP

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Additional Costs=50,000

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3 years ago
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Answer:

a. No impairment should be reported

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The comparison is shown below

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So, no impairment loss would be recognized

3 0
3 years ago
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