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faust18 [17]
4 years ago
11

Amsted, Inc. is considering a project that will increase revenues by $2.5 million, cash operating expenses by $700,000, and depr

eciation and amortization by $300,000 during 2011. For this project, the firm will purchase $800,000 of equipment during the year while decreasing its inventory by $200,000 (with no corresponding decrease in current liabilities). The marginal tax rate for Amsted is 35 percent. What is this project’s incremental after-tax free cash flow for 2011
Business
1 answer:
grandymaker [24]4 years ago
8 0

Answer:

incremental after tax cash flow for 2011: $1,145,000

Explanation:

Additional revenue                                                 $2,500,000

Cash operating expenses                                       ($700,000)

Depreciation and amortization expenses               ($300,000)

<u>Reduced inventories                                               ($200,000)</u>

Pretax income                                                         $1,300,000

<u>Less taxes 35%                                                        ($455,000)</u>

Net income                                                                $845,000

<u>Add Depreciation and amort. expenses                  $300,000</u>

Free cash flow                                                           $1,145,000

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Answer:

Cycle Time = 10.19482 minute

Explanation:

From the question :

The Model E can be illustrated perfectly as shown below:

Process Time Required         Predecessor Task           Learning Rate

                per Unit

A                  9                                                                          82

B                 12                                     A                                  86

C                 18                                     B                                  81

D                 9                                      C                                  90

E                 12                                     D                                  80

F                 17                                     E                                   88

G                 14                                     F                                   83

H                 12                                     G                                  85

I                   8                                      H                                  82

Now For the minutes per week for each Process; we have :

Process Time Required         Predecessor      Learning      Minutes

                per Unit                    Task                   Rate               (Week 16)

A                  9                                                      82               4.069096

B                 12                           A                         86               6.564098

C                 18                          B                          81               7.74841

D                 9                           C                          90              5.9049

E                 12                           D                         80               4.9152

F                 17                            E                         88               10.19482

G                 14                           F                         83              6.644165

H                 12                           G                        85              6.264075

I                   8                            H                        82              3.616974

The objective here is to determine the expected Cycle Time for Model E in Week 16

So, we can equally regard the Cycle Time = Bottleneck of Activity for Week 16.

Cycle Time = 10.19482 minute   in as much as it is the the largest activity time for the week 16

Given that the demand per week is : = 247

The available time per week = 40 hours = 40 × 60 hours = 2400 minutes

Talk Time = Available Time Per Week/Demand Per Week

Talk Time = 2400/247

Talk Time = 9.716599

Thus; here  the cycle time is greater than the talk time.

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