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
MariettaO [177]
3 years ago
10

A firm has sales of $50,000, EBIT of $10,000, depreciation of $4,000, and fixed assets increased by $2,000. If the firm's tax ra

te is 30 percent and a $1,000 increase in net operating working capital, what is the firm's free cash flow?
Business
1 answer:
sergij07 [2.7K]3 years ago
4 0

Answer:

$8,000

Explanation:

Data provided in the question:

Sales = $50,000

EBIT = $10,000

Depreciation = $4,000

Increase in Fixed assets = $2,000

Tax rate = 30%

Increase in net operating income = $1,000

Now,

PAT = EBIT - Tax

= 10,000 - (30% of EBIT)

= $10,000 - (30% of $10,000)

= $10,000 - $3,000

= $7,000

Operating cash flow = PAT + depreciation

= $7,000 + $4,000

= $11,000

Therefore,

Free cash flow

= Operating cash flow - Increase in Fixed asset - Net working capital

= $11,000 - $2,000 - 1,000

= $8,000

You might be interested in
The three major economic impacts of tourism are. a.Cultural facilities, infrastructure, and employment b.Employment, income, and
Mekhanik [1.2K]

Answer:

a.Cultural facilities, infrastructure, and employment

Explanation:

4 0
3 years ago
Read 2 more answers
If businesses are producing at capacity, and the nation is experiencing almost full employment (a very low rate of unemployment
Fittoniya [83]
The federal reserve bank may decide to INCREASE THE INTEREST RATE. Interest rate refers to the amount that is charged for making use of a particular loan. Increasing the interest rate is one of the monetary policy which the federal reserve bank use to control the money supply in an economy. 
7 0
3 years ago
Li Meng purchased a property that had been owned by the same man for more than 40 years. The title search was clean. In the spri
stira [4]

The covenant is against encumbrances.

<h3><u>what is an encumbrance?</u></h3>

A claim made against a piece of property by someone who isn't the owner is called an encumbrance.

  • Encumbrance may affect the property's ability to be transferred and limit its free use until the encumbrance is removed.
  • Real estate is subject to the most prevalent kinds of encumbrances, such as mortgages, easements, and property tax liens.

The previous property owner failed to disclose to Li Meng that there was an easement across the property.

Learn more encumbrance with the help of the following link:

brainly.com/question/14844424?referrer=searchResults

#SPJ4

6 0
1 year ago
The two-stage dividend growth model evaluates the current price of a stock based on the assumption a stock will:_____.
wolverine [178]

The two-stage dividend growth model assesses a stock's present price based on the presumption that it will increase in value at a different rate eternally after growing at a fixed rate for a set period of time.

The payout increases steadily in the first phase for a predetermined period of time. In the second, it is presumable that the dividend will increase at a different pace for the rest of the company's existence.

A mathematical technique called the dividend growth model allows investors to determine a realistic fair value for a company's stock based on its current dividend payout and projected dividend growth in the future.

Learn more about two-stage dividend growth model here.

brainly.com/question/28202802

#SPJ4

4 0
1 year ago
Assume that the CEO of a company gave you the project charter specifying your authority, among others to work on an initiative p
viktelen [127]

Answer:

Characterize a project based on the above narration and distinguish the project manager from an operations manager?

Explanation:

4 0
3 years ago
Other questions:
  • A company purchased a weaving machine for $190,000. The machine has a useful life of 8 years and a residual value of $10,000. It
    14·1 answer
  • Sales mix is a measure of the percentage increase in sales from period to period.
    15·1 answer
  • Suppose the United States can produce two goods, cloth and tea. Suppose there was a technological breakthrough in making cloth O
    11·1 answer
  • Fundamental areas of management in supply chain operations management include:____________
    8·1 answer
  • Which of the following elements of the marketing communications mix refers to any paid form of nonpersonal presentation and prom
    13·1 answer
  • When the double-extension approach to the dollar-value LIFO inventory method is used, the inventory layer added in the current y
    15·1 answer
  • I dont get it<br> can you help ye s didniit os good to dxuiowesxvuedhhgv0x difc id dv h 0oidv
    6·2 answers
  • A bank's actual reserve ratio is the percentage of total deposits a bank actually holds on to. It is made up of the percentage t
    10·1 answer
  • Store Policies that are open to interpretation by store employees
    5·1 answer
  • True or false: Controlling involves developing goals and preparing various budgets to achieve those goals.
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!