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Snowcat [4.5K]
3 years ago
9

During the year, Belyk Paving Co. had sales of $2,275,000. Cost of goods sold, administrative and selling expenses, and deprecia

tion expense were $1,285,000, $535,000, and $420,000, respectively. In addition, the company had an interest expense of $245,000 and a tax rate of 21 percent. (Ignore any tax loss carryforward provision and assume interest expense is fully deductible.)
a. What is the company’s net income?
b. What is its operating cash flow?
c. Explain your results in parts (a) and (b)
Business
1 answer:
ycow [4]3 years ago
5 0

Answer:

a. -$210,000

b. $455,000

Explanation:

a. Company's net income

Sales. 2,275,000

Less:

Cost of goods sold

1,285,000

Administrative and selling expenses

535,000

Depreciation expense

420,000

EBIT

35,000

Less interest

245,000

Taxable income

-$210,000

Taxes 21%

Nil

Net income

-$210,000

b. The operating cash flow for the year

OCF = EBIT + depreciation - taxes

OCF = 35,000 + 420,000 - 0

OCF = $455,000

c. Net income was negative due to the deductibility of interest expense and depreciation.

The actual operating cash flow was positive due to the fact that depreciation is a non cash expense, and also interest is a financing and not an operating expense.

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The return on total assets of River Corps is 0.0789.

<h3>What was its return on total assets?</h3>

The return on total assets is an example of financial ratio. It is the net income divided by total assets. It is an example of a profitability ratio. Profitability ratios measure the efficiency with which a company generates profit from its asset.

Return on total assets = Net income / average total assets

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To learn more about financial ratios, please check: brainly.com/question/26092288

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Janice spends her weekends with her friends at shopping malls. She acknowledges that her weekend shopping outing is driven by bo
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Answer:

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6) For the past few years your company has sold 50,000 units of goods each year at a selling price of $26/unit. Fixed production
lana66690 [7]

Answer:

Explanation:

Expected sales(S) -58000 units

Variable cost ( VC) = $9/unit

Fixed cost ( FC) =$ 300000

Sales price =$26/unit

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b) Marginal contribution rate = contribution per unit of quantity sold

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