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Harrizon [31]
3 years ago
11

Precise Machinery is analyzing a proposed project. The company expects to sell 7,500 units, ±10 percent. The expected variable c

ost per unit is $314 and the expected fixed costs are $647,000. Cost estimates are considered accurate within a ±4 percent range. The depreciation expense is $187,000. The sales price is estimated at $849 per unit, give or take 2 percent. The tax rate is 21 percent. The company is conducting a sensitivity analysis on the sales price using a sales price estimate of $850. What is the operating cash flow based on this analysis? Multiple Choice $2,354,874 $2,703,940 $1,986,675 $2,284,837 $2,293,089
Business
1 answer:
My name is Ann [436]3 years ago
8 0

Solution:

The operating cashflow (OCF), applies to the cash generated by the company from either the revenues it creates excluding long-capital or securities investments.

Operating cash flow is defined by the International Financial Accounting standards when cash produced from transactions, which is less tax and much less interest paid, income from investments and less dividend payments.

OCF {[(849 - $314) x 7,500] - $647,000} {1 - 0.21} + ($187,000 x 0.21)

= {4,012,500- $647,000}[0.79}+39,270

= $1,986,675

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luda_lava [24]
The answers to the blanks provided above are DECREASES and INCREASES, respectively.  This is based on the concept of what a business cycle is. What happens during recession is that they try to restore the economy by expansion, and therefore, through this, the government increases their spending and cutting taxes as well.
8 0
3 years ago
The following financial statement data pertain to Southwater, Inc., a manufacturer of women's suits (dollar amounts in millions)
Firdavs [7]

Answer:

The cost of equity capital is 8.24%

Explanation:

The cost of equity capital of a firm is the required rate of return on a firm's equity. In case of common equity, the required rate of return (r) can be calculated using the CAPM approach. The formula for required rate of return or cost of equity capital under this model is,

r = rRF + Beta * rpM

Where,

  • rRF is the risk free rate
  • rpM is the risk premium on market

r = 0.025 + 0.77 * 0.0745

r = 0.082365 or 8.2365% rounded off to 8.24%

5 0
3 years ago
To ensure quality service and accurate return preparation, every site is required to have a process for assigning taxpayers to I
sergey [27]

Answer:

True

Explanation:

The IRS has an extensive list of basic quality site requirements that every site must comply with in order to ensure quality service and accurate return preparation. A listing of those 10 basic quality site requirements is:

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7 0
3 years ago
Given: Cost of goods manufactured of $410,000; beginning finished goods inventory of $110,000 and ending finished goods inventor
hammer [34]

$395k is the unadjusted cost of goods sold.

The direct costs incurred in the production of any goods or services are measured by the term "cost of goods sold" (COGS).

How is the unadjusted cost of goods determined?

= Cost of producing the goods - ( Ending finished goods -Beginning finished goods inventory )

= $410,000 - ($125,000 - $110,000)

= $410,000 - $15,000

= $395,000

Consequently, $395,000 represents the unadjusted cost of goods sold.

<h3>What is Unadjusted cost?</h3>

Unadjusted basis is the asset's original acquisition price. This sum includes the asset's initial purchase price as well as any additional costs, such as expenses and liabilities taken on during the transaction.

To know more about Unadjusted cost check this out:brainly.com/question/23774073

#SPJ4

4 0
2 years ago
Should the firms' overseas operations be judged by the standards (legal, economic, cultural, and moral) of the country in which
sladkih [1.3K]

Answer: Standards of the country they operate in

Explanation:

Various countries have differing norms on what is legally, socially, morally and culturally acceptable. In order to be able to operate in those countries, companies would have to adapt to these requirements in order to maximize business operations.

It would therefore be illogical to judge these overseas operations in terms of the U.S. market which would be different from them. They should be judged on their own merit and then a standardizing factor can be used to relate them to the U.S. market to see whether they are performing well given their unique circumstances.

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