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
podryga [215]
4 years ago
5

Temporary Housing Services Incorporated (THSI) is considering a project that involves setting up a temporary housing facility in

an area recently damaged by a hurricane. THSI will lease space in this facility to various agencies and groups providing relief services to the area. THSI estimates that this project will initially cost $5 million to setup and will generate $20 million in revenues during its first and only year in operation (paid in one year). Operating expenses are expected to total $12 million during this year and depreciation expense will be another $3 million. THSI will require no working capital for this investment. THSI's marginal tax rate is 35%. Ignoring the original investment of $5 million, what is THSI's free cash flow for the first and only year of operation
Business
1 answer:
Tema [17]4 years ago
7 0

Answer:

$6.25 million

Explanation:

Calculation for free cash flow

Using this formula

Free Cash Flow = (Revenues - Expenses-Depreciation) × (1–Tax rate) + Depreciation

Let plug in the formula

Free Cash Flow= ($20 million - $12 million - $3 million ) × (1–0.35) + $3 million

Free Cash Flow=($5 million*0.65)+$3 million

Free Cash Flow=$3.25million+$3 million

Free Cash Flow=$6.25 million

Therefore free cash flow for the first and only year of operation wiill be $6.25 million

You might be interested in
The law of diminishing marginal returnsa. explains why the average total cost, average fixed cost and marginal cost curves are U
Novosadov [1.4K]

Answer:

c) explains why the average total cost and marginal cost curves are U-shaped in the short run.

Explanation:

According to the law of diminishing returns, when one input variable is increased, the result is seen in the increase in the output. At some point in the production, when an additional factor is added, the output increases but in smaller return. One factor remains fixed in the process of diminishing return. The variable factor is increased at any point of production which do not prove much productive.

8 0
3 years ago
If lucinda has only $18 to spend and the price of kewpie dolls and the price of beanie babies are both $6, how many of each woul
Step2247 [10]
<span>Lucinda could buy either 2 kewpie dolls and 1 beanie baby, or 1 beanie baby and 2 kewpie dolls at $6 a piece if she has $18. Rationally, Lucinda would want at least one of each toy. Whether she went with the first or second option the amount she would spend would be as follows: $6Ă—3 toys=$18.</span>
6 0
4 years ago
Pva inc.'s net income for the most recent year was $16,085. the tax rate was 40 percent. the firm paid $3,896 in total interest
Natalka [10]

cash coverage ratio: <span>

</span>

Earnings Before Interest and Taxes + Non-Cash Expenses / Interest Expense <span>

16,085/(1-tx) = 16,085 / 0.60 = 26,808.33 <earnings before taxes 
add back interest of 3,896 and depreciation of 2,575 = 26,808.33 + 3896 + 2575 = 26,808.33 

solve: 
26,808.33 / 3896<int exp = 6.88 
<span>so cash was 6.88 x interest expense </span></span>

5 0
3 years ago
Power Pro, a leading manufacturer of lawn and garden equipment, releases a new line of cordless, lightweight, electric weed trim
Reika [66]

Answer: 3. Sales Promotion

Explanation: Sales Promotion is a promotion mix strategy to entice consumers to particular product. it includes the issuance of discount on selling price, contest etc.

4 0
3 years ago
Discount Mart borrows $400,000 on July 1 with a short-term loan that has an annual interest rate of 6% payable on the first day
adelina 88 [10]

Answer:

C. $6,000; Increase expenses, increase liabilities

Explanation:

The computation is shown below:

= Borrowed amount × rate of interest × given months ÷ Total months

= $400,000 × 6% × 3 months ÷ 12 months

= $6,000

So this $6,000 represent an increase in liabilities and increase in expenses

hence, the correct option is c.

8 0
3 years ago
Other questions:
  • Based on this passage, mcdonald’s is serving rice in its indonesian restaurants as a __________ because of the _____________ in
    7·1 answer
  • The biggest factor in determining the price of a mortgage is:
    15·1 answer
  • A market in which buyers and sellers are free to buy and sell as they wish is known as a A. global market. B. common market. C.
    11·2 answers
  • Which of the following best describes the extension of a design to allow for a margin of error when trimming?
    8·1 answer
  • At the beginning of the school year, Priscilla Wescott decided to prepare a cash budget for the months of September, October, No
    14·1 answer
  • Cash Flow Statement Shows cash from operating, investing, and financing activities Accounting Equation Assets = Liabilities + Eq
    13·1 answer
  • Nick's Marine Company (NMC) currently has a stock price per share of $38. If NMC's cost of equity capital (the discount rate for
    5·1 answer
  • Based on his investment advisor's guidance, Christopher sold two stocks during 2020. The capital gain on the sale of Magnificent
    11·1 answer
  • Firm A plans to introduce a new smart phone which has a potential market of 1 million customers. The marketing research conducte
    13·1 answer
  • Who is responsible to ensure that each department and division identify current deficiencies and methods for improvement?
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!