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Mashcka [7]
3 years ago
6

KSB is considering a project that will require $39,000 in net working capital and $68,000 in fixed assets. The project is expect

ed to produce annual sales of $78,500 with associated cash costs of $41,000. The project has a four-year life. The company uses straight-line depreciation to a zero book value over the life of the project. Ignore bonus depreciation. The tax rate is 25 percent. What is the operating cash flow for this project
Business
1 answer:
Inessa05 [86]3 years ago
6 0

Answer:

$32,375

Explanation:

The computation of operating cash flow for this project is shown below:-

Annual depreciation  = Cost of fixed assets ÷ Life in years

= $68,000 ÷ 4 years

= $17,000

Operating cash flow

Annual sales                  $78,500

less: Cash cost             ($41,000)

less: Depreciation        ($17,000)

Earnings before tax       $20,500

less: Tax at 25%               ($5,125)

Earnings after tax             $15,375

Add: Depreciation             $17,000

Operating cash flow

every year                       $32,375

Therefore the operating cash flow is $32,375

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KonstantinChe [14]

Answer:

The correct answer is D. Economies of scope.

Explanation:

The Economies of scope means the reduction of the average costs under the production of two or more products or services together. This must always be observed in the production process, in order to strategically plan the entire internal production process of the company. By implementing this type of joint production, great savings are achieved in own production factors, seeking effective diversification in the market.

5 0
3 years ago
Firms issue callable bonds to give them financing flexibility in case future interest rates. True or False
AURORKA [14]

true is the answer for sure !!

7 0
3 years ago
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the total estimated cost of attending a public year to year college is 2265. The cost of attending a college is expected to incr
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5% of 2265$ is 113,25$
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8 0
2 years ago
On January 1, 2021, Splash City issues $340,000 of 9% bonds, due in 20 years, with interest payable semiannually on June 30 and
Evgesh-ka [11]

Answer:

Dr cash                                          $310,831

Dr discount on bonds payable   $29,169

Cr bonds payable                                             $340,000

On 30th June 2021

Dr  interest expense      $ 15,542  

Cr cash                                            $15,300

Cr discount on bonds payable        $242

On 31st   December  2021

Dr  interest expense      $ 15,554  

Cr cash                                            $15,300

Cr discount on bonds payable        $254

Explanation:

The bond issued at a discount is the first bond whose cash proceeds of $310,831 were less than face value of $340,000.

Discount=face value -cash proceeds=$340,000-$310,831=$29,169.00  

Find attached bond amortization schedule.

Download xlsx
7 0
3 years ago
The management of Bullinger Corporation would like to investigate the possibility of basing its predetermined overhead rate on a
Anit [1.1K]

Answer:

$5,160

Explanation:

Predetermined Overhead Rate on Capacity = Total Estimated Manufacturing Overhead / Estimated Capacity for the Year

Predetermined Overhead Rate on Capacity = $34,840 / 29,000 MH

Predetermined Overhead Rate on Capacity = $1.20 MH

Actual use of capacity = 24,700 hours

Unused hours = 29,000 hours - 24,700 hours

Unused hours = 4,300 hour

Cost of unused capacity = 4,300 hours * $1.20 MH

Cost of unused capacity = $5,160

4 0
2 years ago
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