1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Citrus2011 [14]
3 years ago
6

Stanton Inc. is considering the purchase of a new machine that will reduce manufacturing costs by $5,000 annually and increase e

arnings before depreciation and taxes by $6,000 annually. Stanton will use the Modified Accelerated Cost Recovery System (MACRS) method to depreciate the machine, and it has estimated the depreciation expense for the first year as $8,000. What is the supplemental operating cash flow for the first year?
Business
1 answer:
iris [78.8K]3 years ago
6 0

Answer:

$9,800

Explanation:

The computation of the supplemental operating cash flow for the first year is shown below:-

For computing the supplemental operating cash flow for the first year first we need to follow some steps to reach the answer which is here below:-

Total Inflows = Annual savings in cost + Increase in earning

= $5,000 + $6,000

= $11,000

Earnings before tax = Total Inflows - Depreciation

= $11,000 - $8,000

= $3,000

Tax = Earnings before tax × 40%

= $3,000 × 40%

= $1,200

Earning after tax = Earnings before tax - Tax

= $3,000 - $1,200

= $1,800

Cash flow in year 1 = Earning after tax + Depreciation

= $1,800 + $8,000

= $9,800

So, for computing the cash flow in year 1 we simply added earning after tax with depreciation.

You might be interested in
You are analyzing cost data for your boss related to a special order your company is considering from a large customer in Singap
valkas [14]

Answer:

In surrounding the appropriate response, it is accepted that units are 1000 of the request.  

In this manner complete commitment would be:  

Sales = 49950  

Variable Costs = 10500  

Variable Selling Exp = 18250  

Contribution = 21200  

Since client is demanding to keep commitment at certain level, it wont be advantageous for the organization since organization wont gain same measure of $ 21200 as commitment in such circumstance when it needs to pay $ 5000 extra for the custom discharge despite the fact that selling costs would be eliminated and figures would be this way:  

Sales = 23320  

Variable Costs = 10500  

Variable Selling Exp = 0  

Contribution = 12820  

Part 1: Accounting issues:  

  • This would present bookkeeping dilemma to report deals at not exactly the value charges to different clients  
  • There would be accounted for misfortune if request acknowledged  

Moral issues:  

  • Different clients would feel off-base as we would be caring a lot more significant expense to them  
  • Representatives may likewise be snorted in light of the fact that additional time charges may not make up for the time went through with the family
3 0
3 years ago
On average most companies aim for? Inventory turns per year.
xz_007 [3.2K]

Answer:

Most companies aim for a turnover ratio between six and 12, according to BusinessKnowHow. Turning inventory too many times means a company misses out on potential sales because it does not keep enough product in stock

7 0
3 years ago
Consider an open market purchase by the Fed of $3 billion of Treasury bonds. What is the impact of the purchase on the bank from
oksano4ka [1.4K]

With the purchase of the bonds, the money supply in the bank will increase.

<u>Explanation:</u>

Open market purchase strategy or method is a method that the government uses to control supply of money in the economy of a country. If the money supply increases in the economy, then the government sells the treasury bonds to the public to decrease money in hand and if money supply decreases then it buys bonds from public to increase the money in their hand so that they buy more products and the economy grows.

So if for this purpose, the government will buy the treasury bonds from a bank, then the money supply with that bank will increase.

6 0
3 years ago
A company invests $1 million to clear land and plant pine trees. The trees will mature in 10 years and the company expects to se
Len [333]

Answer:$300,000

Explanation:if the company sells the trees at the rate of $3000000 in 10 years, the annual rate of return on $ 1000000 investment will be $300000 ($3000000/10=$300000).

7 0
3 years ago
Calculate the geometric average return earned by an investor over three years if she earned 6% in the first year of an investmen
Anastasy [175]

Answer:

Calculate the geometric average return earned by an investor over three years if she earned 6% in the first year of an investment, 12% in the second year and 10% in the third year. 9.36% 9.27% 9.30% 9.33%

Explanation:

Calculate the geometric average return earned by an investor over three years if she earned 6% in the first year of an investment, 12% in the second year and 10% in the third year. 9.36% 9.27% 9.30% 9.33%

5 0
3 years ago
Other questions:
  • Real money demand curve in the space of R (Y-axis) and M/P: 3) _______ A) slopes upward because a fall in the interest rate rais
    14·1 answer
  • Treasury stock shares are________________.a. unissued shares that are held by the treasurer of the corporation.b. part of the to
    6·1 answer
  • Seeking positions of power and responsibility, Chandra has rapidly moved up the ranks within her organization. Colleagues descri
    11·1 answer
  • Brazil can produce one unit of sugar cane for one unit of labor and one iPod for eight units of labor, and China can produce one
    15·1 answer
  • Golden Enterprises started the year with the following: Assets $131,000; Liabilities $44,000; Common Stock $74,000; Retained Ear
    11·1 answer
  • The following information pertains to Tamarisk, Inc.. 1. Cash balance per bank, July 31, $7,923. 2. July bank service charge not
    8·1 answer
  • A study is designed to evaluate how an employee reacts to interruptions when attempting to answer his/her email. After several i
    8·1 answer
  • John is working on his department's annual plan. Employee performance has been okay and commitment to his department's goals mod
    15·1 answer
  • Profits are maximized when marginal revenue and marginal costs are ______.
    10·1 answer
  • When ________, business firms will collectively supply a lower quantity of output at any given price, and the supply curve will
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!