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Savatey [412]
3 years ago
11

Johnson Battery Systems recently reported $9,000 of sales, $6,000 of operating costs other than depreciation, and $1,500 of depr

eciation. The company had no amortization charges, it had $4,000 of bonds that carry a 7% interest rate, and its federal-plus-state income tax rate was 40%. In order to sustain its operations and thus generate sales and cash flows in the future, the firm was required to make $800 of capital expenditures on new fixed assets and to invest $500 in net operating working capital. What was its free cash flow?
Business
1 answer:
muminat3 years ago
8 0

Answer:

$1,100

Explanation:

EBIT = Sales - Costs - Depreciation

       = $9,000 - $6,000 - $1,500

       = $1,500

Net income = EBIT - Tax @ 40%

                    = $1,500 - $600

                    = $900

Operating cash flow = Net income + Depreciation

                                  = $900 + $1,500

                                  = $2,400

Free cash flows:

= Operating cash flow - Increase in working capital - Capital expenditure

= $2,400 - $500 - $800

= $1,100

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The journal entry to record the use of utilities in a factory could include which two of the following: (You may select more tha
evablogger [386]

Answer:

The correct options are:

A. Debit to Factory Overhead

D. Credit to Factory Utilities Payable

Explanation:

The debit entry of the use of utilities in  a factory would be recorded in factory overhead since cost of utilities is a not a direct factory cost.

However, the corresponding credit would be in the factory utilities payable as an obligation awaiting payment to be made to  the supplier of  the service being enjoyed by the factory in order to run on daily basis

6 0
3 years ago
Read 2 more answers
In the short run, the quantity of output that firms supply can deviate from the natural level of output if the actual price leve
timofeeve [1]

Answer:

1.  Rise

2.  Increasing

3.  Rise

Explanation:

For example, the sticky-wage theory asserts that output prices adjust more quickly to changes in the price level than wages do, in part because of long-term wage contracts. Suppose a firm signs a contract agreeing to pay its workers $15 per hour for the next year, based on an expected price level of 100. If the actual price level turns out to be 110, the firm's output prices will RISE, and the wages the firm pays its workers will remain fixed at the contracted level. The firm will respond to the unexpected increase in the price level by INCREASING the quantity of output it supplies. If many firms face similarly rigid wage contracts, the unexpected increase in the price level causes the quantity of output supplied to RISE above the natural level of output in the short run.

The above explanation is the reason why the aggregate supply curve slopes upward in the short run

5 0
3 years ago
DYI Construction Co. is considering a new inventory system that will cost $750,000. The system is expected to generate positive
Oksanka [162]

Answer:

Year Cashflow        [email protected]% PV

$                      $

0 (750,000)             1          (750,000)

1        350,000               0.9259    324,065

2       325,000               0.8573     278,623

3        250,000              0.7938      198.450

4        180,000               0.7350      132,300

                                        NPV         184,438

The correct answer is D. The difference in answers is due to rounding error.

Explanation:

Net present value is the diffrence between initial outlay and present value of inflow. We need to discount the cash inflows for year 1 to year 4 at 8% and then calculate the present value of cash inflows by multiplying the cash inflows by the discount factors. Finally, we will calculate NPV by deducting the initial outlay from the present value of cash inflows.

6 0
3 years ago
ear Net Income Profitable Capital Expenditure 1 $ 14 million $ 8 million 2 18 million 11 million 3 9 million 6 million 4 20 mill
Maru [420]

Answer:

$42 Million

Explanation:

The computation of the total cash dividend is shown below:-

Year Net Income Profitable capital Expenditure Dividends

1        $14 Million       $8 Million                                   $6 Million

2        $18 Million     $11 Million                                    $7 Million

3        $9 Million      $6 Million                                     $3 Million

4         $20 Million   $8 Million                                    $12 Million

5        $23 Million    $9 Million                                    $14 Million

Total cash dividends                                                  $42 Million

8 0
3 years ago
Jordan is a sales officer who has been underperforming over the last three months. At the last monthly operations cycle meeting,
Rashid [163]

Answer:

D. Filtering.

Explanation:

Business content filtering has two objectives – to prevent network users visiting unsafe websites and to enforce Internet user policies. The first objective is achieved by each request to visit a website being checked against blacklists of known unsafe websites

6 0
3 years ago
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