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
anygoal [31]
3 years ago
7

My existing business generate $135000 in EBIT. The corporate tax rate applicable to my business is 35%. Deprecaition reported in

the financial statement is $25714. I don't need to spend any more for new equipment; however, I need $20250 additiona cash. I need to purchase $10800 in additional supplies such tableclothes and napkins on credit. It is also estimated that my accrual including taxes and wage payable will increase by $6750. Based on the information provided what will be my Free Cash Flow (FCF)?
Business
1 answer:
Crazy boy [7]3 years ago
8 0

Answer: $99,964

Explanation:

Given that,

EBIT = $135,000

Corporate tax rate = 35% of $135,000 = $47,250

Depreciation = $25,714

Need additional cash = $20,250

Additional supplies = $10,800

Accrual including taxes and wage payable will increase by $6,750

Operating cash flow = EBIT - Taxes + Depreciation

                                  = $135,000 - $47,250 + $25,714

                                  = $113,464

Investment in operating capital = Additional capital expenditure + Increase in NWC( net working capital)

                                              = $0 + [($20,250 + $10,800) - ($10,800 + $6750)

                                              = $13,500

Free Cash Flow (FCF) = Operating cash flow - Investment in operating capital

                                    = $113,464 - $13,500

                                    = $99,964

You might be interested in
Department S had no work in process at the beginning of the period. It added 13,600 units of direct materials during the period
lora16 [44]

Answer:

Cost of units completed = $176,528

Workings are attached:

Explanation:

Equivalent unit of production

An equivalent unit of production is an expression of the amount of work done by a manufacturer on units of output that are partially completed at the end of an accounting period. Basically the fully completed units and the partially completed units are expressed in terms of fully completed units.

Equivalent units are used in the production cost reports for the producing departments of manufacturers using a process costing system. Cost accounting textbooks are likely to present the cost calculations per equivalent unit of production under two cost flow assumptions: weighted-average and FIFO.

Conversion costs

Conversion costs is a term used in cost accounting that represents the combination of direct labor costs and manufacturing overhead costs. In other words, conversion costs are a manufacturer's product or production costs other than the cost of a product's direct materials.

Expressed another way, conversion costs are the manufacturing or production costs necessary to convert raw materials into products.

The term conversion costs often appears in the calculation of the <u>cost of an</u> <u>equivalent unit in a process costing system.</u>

For the sake of this question, we will be determining the <u>equivalent units of production:</u>

  • Units completed and transferred subject to material and conversion costs
  • Units in the closing inventory subject to material and conversion costs
  • We will then calculate the cost per units with respect to material and conversion costs for the equivalent units.
  • These cost per units will enable us to determine the cost of items completed.
Download xlsx
4 0
2 years ago
Global Technology’s capital structure is as follows: Debt 50 % Preferred stock 35 Common equity 15 The aftertax cost of debt is
solmaris [256]

Answer:

The computation is shown below:

Explanation:

The computation is shown below:

For weighted cost of each source of capital is

Debt:

= Cost of debt × Weight of debt

= 9% × 50%

= 4.5%

Equity

= Cost of equity × weight of equity

= 16% × 0.15

= 2.4%

Preferred stock

= Cost of preferred stock × weight of preferred stock

= 12.50% × 35%

= 4.375%

Now the weighted average cost of capital is

= 4.5% + 2.4% + 4.375%

= 11.275%

Therefore in the first part we multiplied the cost with the weight of each source of capital

And, then we add the all answers

8 0
3 years ago
Industrialized former colonial states that dominate the world economic system are?
Verizon [17]
Industrialized former colonial states that dominate the world economic system: Core Countries
5 0
1 year ago
e payoff matrix below shows the payoffs (in millions of dollars) for two firms, A and B, for two different strategies, investing
Harman [31]

Answer:

Invest

invest

Explanation:

Game theory looks at the interactions between participants in a competitive game and calculates the best choice for the player.

Dominant strategy is the best option for a player regardless of what the other player is playing

firm a can either earn20 or 70 if it advertises or 5 or 50 if it does not advertise. this is the same for firm B.

Thus the option that would yield the highest payoff is for both firms to advertise.

this is an example of prisoners dilemma

7 0
2 years ago
What are OPR sanctions
Arada [10]
OPR stands for Office of Professional Responsibility. OPR is a governing body that announces disciplinary sanctions. The OPR sanctions involves attorney, certified public announcements, appraisers, etc. OPR sanctions are disciplinary sanctions that are imposed when any violation of applicable standards occur. 
4 0
2 years ago
Other questions:
  • On October 5, Cullumber Company buys merchandise on account from Marin Company. The selling price of the goods is $6,650, and th
    15·1 answer
  • Determine the required rate of return for Johnson and Johnson​, assuming the geometric growth rate was 13.04​% for the period​ 2
    11·2 answers
  • In the event a policy is delivered by an agent to the insured, and the premium payment is to be collected at the time of this de
    9·1 answer
  • Harry, Hermione, and Ron formed an S corporation called Bumblebore. Harry and Hermione both contributed cash of $40,300 to get t
    5·1 answer
  • When an investor was analyzing the risks in a property, he was considering an 8% return on his investment compared to a 10% retu
    15·1 answer
  • Chips Corp., has contacted Cierra with an offer to sell to Cierra 10,000 of the chips for $22.00 per chip. If Cierra accepts the
    13·1 answer
  • John wants his assessment reduced by 30% since his property is located next to a power plant. The SCAR hearing officer granted J
    7·1 answer
  • Several studies indicate that the use of collaborative research agreement (between several firms, research centers, suppliers, c
    11·1 answer
  • You are working as a manager of a financial planning office where you require your employees to have a presence on social media.
    13·1 answer
  • What are the two characteristics of public goods? is u.s. border control a public good or a private good? why? how about satelli
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!