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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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satela [25.4K]

Answer:

The reason many consumers have changed their views about the value of online content so that they are now willing to pay small fees for it is that:

The costs and quality of online products and services compare with those in stores.  Since online transactions are relatively more secure than physical transactions, people are generally more willing to pay for the secured transactions offered online.

Explanation:

In the modern computer age, many products and services are now being offered online.  This makes the physical stores of yesteryears unnecessary.  People are even ready to pay some small fee to receive these goods and services through online transactions instead of visiting physical stores to pick their desired products and services.  This has reinforced online marketing and delivery of products and services.  Many companies are now jettisoning their physical stores to trade online.  And customers are finding the experience uplifting, secure, and satisfactory.  One can transfer money to distant suppliers of goods and services without leaving their offices and homes.  Overcrowding in banking halls and paper expenses are being avoided.  Banks are also reducing their physical infrastructure and personnel.  These are among the benefits of online content-based transactions.

8 0
2 years ago
Zacher Co.'s stock has a beta of 1.40, the risk-free rate is 4.25%, and the market risk premium is 5.50%. What is the firm's req
mihalych1998 [28]

Answer:

The answer is option (C). The firm's required rate of return=11.95%

Explanation:

The required rate of return can be expressed using the formula below;

RRR=RFR+B(MRR)

where;

RRR=required rate of return

RFR=risk free return

B=beta

MRR=market rate of return

In our case;

RRR=unknown

RFR=4.25%

B=1.4

MRR=5.5%

This can be written as;

Required rate of return=risk free return+(beta×market rate of return)

replacing;

RRR=4.25%+(1.4×5.5)

RRR=(4.25%+7.7)=11.95%

The firm's required rate of return=11.95%

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A construction and building inspector is checking the site of a pre-construction demolition. What items would the inspector expe
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3 years ago
When determining the cost of a manufactured good under an operation-costing system, a company would: often switch to a job-costi
Mama L [17]

Answer:

The correct answer is letter "D": trace direct-material cost to each product produced and use a predetermined application rate for conversion cost.

Explanation:

The Operation-costing system combines <em>Process Costing </em>with <em>Job costing</em>. Process costing is mostly used for mass-production undifferentiated goods so each product will be given the same cost. Job Costing, instead, is typically used for manufacturers of tailored products, thus, each product has different <em>material, direct labor, </em>and <em>overhead costs</em>.

So, <em>to determine the costs of manufactured goods under the operation-costing system, direct material should be allocated separately and the use of an application will be necessary to determine the conversion cost -the combination of direct labor and overhead.</em>

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Lapatulllka [165]

Answer:

B.

Explanation:

6 0
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