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atroni [7]
3 years ago
6

Stellar Plastics is analyzing a proposed project with annual depreciation of $19,500 and a tax rate of 34 percent. The company e

xpects to sell 12,000 units, plus or minus 5 percent. The expected variable cost per unit is $3.20 plus or minus 4 percent, and the expected fixed costs are $30,000 plus of minus 2 percent. The sales price is estimated at $7.50 a unit, plus or minus 4 percent. What is the operating cash flow for a sensitivity analysis using total fixed costs of $31,000
Business
1 answer:
marysya [2.9K]3 years ago
0 0

Answer:

$20,226

Explanation:

expected sales = 11,400 - 12,000 - 12,600

expected sales price = $7.20 - $7.50 - $7.80

expected variable cost = $3.072 - $3.20 - $3.328

total fixed costs = $31,000

if you use an excel spreadsheet you can calculate all the different possible simulations and combine all the expected sales x 3 different price levels x 3 different variable costs and 1 fixed cost. Once you get all the 27 possible solutions, you just get the average.

I attached it because there is no room here.

Download pdf
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Answer:

After tax cash flow    $44,281.60

After tax cash flow   ($30,518.40)

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In the first case when the interest income of $74,800 ,the after-tax cash flow would be taxed as follows"

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If the entire interest income represents the original  issue discount,which is the difference between the face value and the issue price,after tax cash  flow is computed thus:

The OID is taxable as if it accrues over the duration of the investment(bonds),hence a portion of the OID would be assessed to tax each year (assume the duration of investment is 5 years)

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before tax cash flow    $14,960 .00

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