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sleet_krkn [62]
3 years ago
9

The owner of a bicycle repair shop forecasts revenues of $160,000 a year. Variable costs will be $50,000, and rental costs for t

he shop are $30,000 a year. Depreciation on the repair tools will be $10,000. Prepare an income statement for the shop based on these estimates. The tax rate is 35%. Calculate operating cash flow for the year by using all three methods: (a) Dollars in minus dollars out; (b) Adjusted accounting profits; and (c) Add back depreciation tax shield. Operating Cash Flovw Method a. Dollars in minus dollars out b. Adjusted accounting profits c. Add back depreciation tax shield
Should all the above approaches result in the same value for cash flow.

a. Yes
b. No
Business
1 answer:
elena55 [62]3 years ago
4 0

Answer and Explanation:

Revenue                              $160,000

Rental Costs                      $30,000

Variable Costs                      $50,000

Depreciation                      $10,000

Profit before tax              $70,000

Tax(35%)                              $24,500

Net Income                      $45,500

Operating cash flow

a) Dollars in minus dollars out

Revenue ? rental costs ? variable costs ? taxes = $160000 -$30000-$50000-$24,500 = $55,500

b) Adjusted accounting profits

Operating cash flow = Net income + depreciation = $45,500 + $10,000 = $55,500

c) Add back depreciation tax shield

Operating cash flow = [(Revenue ? rental costs ? variable costs) × (1 ? 0.35)] + (depreciation × 0.35)]

= ($160,000-$30000-$50,000)*0.65 + $10,000*0.35 = $55,500

Yes, the above approaches result in the same value for cash flow

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Answer:

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Explanation:

Tantalum is a metal used to manufacture electronics such as cell phones, computers and digital cameras. The problem with tantalum is that it is found in coltan ore, which is mostly mined in Africa. The African country with the largest tantalum exports is Congo, a country devastated by continuous civil wars. Millions of people have been killed in these civil wars and the warlords control coltan mines.

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Because human behavior is unreliable and influenced by factors uncontrolled by policy, which domain represents the greatest risk
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Answer:

The correct answer is letter "A": User Domain.

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In their simplest form, bonds are pure ________. a) debt b) equity c) hybrid security d) current assets
melomori [17]

In their simplest form, bonds are pure a) debt.

<h3>What are bonds?</h3>
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Firm X and Firm Y both sell the same products at the same price; both firms are the same size with identical sales levels; Firm
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Answer:

The options are given below:

A. Firm X

B. Firm Y

C. Same variability of operating profits

D. It would depend on tax effect on taxable income

The correct option is B. Firm Y

Explanation:

This is because firm Y has a higher operating leverage than firm X.

<u>Operating Leverage</u> refers to a cost-accounting formula that measures the degree to which a firm can increase operating income by increasing revenue. Operating leverage actually boils down to the analysis of fixed costs and variable costs, and it is highest in companies that have a high fixed operating costs in comparison with variable operating costs. What this means is that this kind of company makes use of more fixed assets. On the other hand, operating leverage is lowest in companies that have a low fixed operating costs when compared with variable operating costs.

Companies with high operating leverage are capable of making more money from each additional sale if they do not have to incur more costs to produce more sales.

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strojnjashka [21]

Answer:

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Jared's boss allows his staff to give inputs but he makes the ultimate decision .

In an autocratic leadership style, the leader doesn't take any input from employees when making decisions.

Laissez faire is a type of leadership style where employees are given a free rein in the company.

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