Answer:
Net cash flow for The Rogers Corporation: $435,200
Net cash flow for The Evans Corporation: $332,400
Explanation:
For The Rogers Corporation:
Income before tax = $746,000 - $305,000 - $224,000 = $217,000
Tax = $217,000 x 40% = $86,800
Net income afer tax = $217,000 - $86,800 = $130,200
Net cash flow = Gross profit - Selling and administrative expense - Tax = $746,000 - $224,000 - $86,800 = $435,200
For The Evans Corporation
Income before tax = $746,000 - $48,000 - $224,000 = $474,000
Tax = $474,000 x 40% = $189,600
Net income afer tax = $474,000 - $189,600 = $284,400
Net cash flow = $746,000 - $224,000 - $189,600 = $332,400
