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3 years ago

Depreciation for a tax-paying firm:_________.

Business

1 answer:

r-ruslan [8.4K]3 years ago

5 0

Answer: a) increases expenses and lowers taxes.

Explanation:

Depreciation accounts for the wear and tear in fixed assets over their period of use. It is accounted for every period in the Income Statement as an expense which means that its addition increases the business's expenses.

It does that the advantage of being tax deductible however. This then means that it can be subtracted from Net Income for tax purposes. When that is done, it will reduce the Net Income thereby reducing the amount of taxes that can be charged on the company.

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Fastforward has net income of $18,955, and assets at the beginning of the year of $200,000. assets at the end of the year total

STALIN [3.7K]

Its return on assets is 8.5%.

<h3>What is return on assets?</h3>

The return on assets measures how profitable a company's assets are at generating income.

Return on assets (ROA) measures how lucrative a company is in relation to the assets or resources it owns or controls. ROA can help investors uncover potential stock opportunities because it reveals how efficient a firm is at leveraging its assets to produce profits.

Return on Equity (ROE) is commonly defined as net income divided by equity, whilst Return on Assets (ROA) is defined as net income divided by average assets.

Return on Assets (ROA) is a sort of ROI metric that assesses a company's profitability in relation to its total assets.

To know more about return on assets follow the link:

brainly.com/question/17289987

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8 0

1 year ago

K Company estimates that overhead costs for the next year will be $3,600,000 for indirect labor and $950,000 for factory utiliti

Savatey [412]

Answer:

$43.75 per direct labor Hour

Explanation:

Overhead rate is the rate of allocation of overheads based on an activity. In this question direct labor is used as an activity. Total overhead of a plant also includes the utilities of the plant.

Total Overhead of plant = $3,600,000 + $950,000 = $4,550,000

Direct labor hours = 104,000 hours

We can calculate the overhead rate after dividing total overhead with total direct labor hours.

Plant-wide overhead rate = $4.550,000 / 104,000 = $43.75 per direct labor Hour

6 0

3 years ago

Calculate free cash flow for 2017 for Monarch Textiles, Inc., based on the financial information that follows. Assume that all c

Luda [366]

Answer:

$34.39

Explanation:

EBIT = EBT + Interest Expense

EBIT = 369.00 + 50

EBIT = $419

Tax Rate = Tax / EBT

Tax Rate = 147.60 / 419

Tax Rate = 0.352267

Tax Rate = 35.23%

Working Capital, 2017 = Current Assets, 2017 - Current Liabilities, 2017

Working Capital, 2017 = 595 - 345

Working Capital, 2017 = $250

Working Capital, 2016 = Current Assets, 2017 - Current Liabilities, 2017

Working Capital, 2016 = 430 - 265

Working Capital, 2016 = $165

Change in Working Capital = Working Capital, 2017 - Working Capital, 2016

Change in Working Capital = $250 - $165

Change in Working Capital = $85

Capital Expenditure = Net Fixed Assets, 2017 - Net Fixed Assets, 2016

Capital Expenditure = $304 - $152

Capital Expenditure = $152

Free Cash Flow = EBIT * (1 - Tax Rate) - Change in Working Capital - Capital Expenditure

Free Cash Flow = $419*(1- 35.23%) - $85 - $152

Free Cash Flow = $271.39 - $85 - $152

Free Cash Flow = $34.39

7 0

3 years ago

shelly is 3 years older than Michele. four years ago the sum of their age was 67. find the age of each person now.

mash [69]

This was 4 years ago - 32 Michele - 35 Shelly
Now - Michele is 36, Shelly is 39

7 0

3 years ago

The contribution margin ratio is 25% for Crowne Company and the break-even point in sales is $260,000. If Crowne Company's targe

AlekseyPX

Answer:

sale is $4000

Explanation:

given data

margin ratio = 25%

sales = $260,000

operating profit = $66,000

solution

we get here Break even sales that is express as

Break even sales = Fixed expense ÷ Contribution Margin Ratio ...........1

put here value

$260,000 = Fixed Expenses ÷ 25%

Fixed Expenses = $65000

so here we consider sale is = x

we know net income is express as

Net Income = Contribution - Fixed Expenses ................2

so Contribution = 25% x

put value in equation 2

25% x - $65000 = $66,000

solve it we get

x = 4000

so sale is $4000

4 0

3 years ago