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Alexandra [31]
3 years ago
9

Consider the case of Purple Panda Pharmaceuticals: Next year, Purple Panda is expected to earn an EBIT of $2,000,000, and to pay

a federal-plus-state tax rate of 30%. It also expects to make $500,000 in new capital expenditures to support this level of business activity, as well as $35,000 in additional net operating working capital (NOWC). Given these expectations, it is reasonable to conclude that next year Purple Panda will generate an annual free cash flow (FCF) of (rounded to the nearest whole dollar).
Business
1 answer:
Effectus [21]3 years ago
3 0

Answer:

Purple Panda Pharmaceuticals

Annual Free Cash Flow (FCF):

FCF = Sales Revenue - (Operating costs + Taxes) - Required investments in operating capital or net operating profit after taxes - net investment in operating capital =

Net Income =              $1,400,000

additional NOWC =           35,000

Capital expenditures =  500,000

FCF = $865,000

Explanation:

a) Data and Calculations:

EBIT = $2,000,000

Tax = 30% or $600,000

Net Income =              $1,400,000

additional NOWC =           35,000

Capital expenditures =  500,000

FCF = $865,000

Purple Panda Pharmaceuticals' Free Cash Flow shows what is available for distribution to security holders after the payment of taxes.  Purple Panda will use the information from its Free Cash Flow to judge if a project will pay off and generate enough cash flow so that shareholders' value will be enhanced.

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Wells Technical Institute (WTI), a school owned by Tristana Wells, provides training to individuals who pay tuition directly to
Vlada [557]

Answer:

See explanation Section

Explanation:

Adjusting Entries

Req. A, B

A. <em>Since the partial amount of insurance policy has been expired-</em>

Debit      Insurance Expense        $3,203

Credit             Prepaid Insurance              $3,203

An expense will be appeared and the current assets will be decreased.

B. Debit     Teaching supplies Expense        $7,528

Credit               Teaching supplies                               $7,528

<em>As the company has $2,776 supplies available from $10,304, teaching supplies expense will appear as $7,528 = (10,304 - 2,776)</em>

Req. C, D, and E

C. Debit     Depreciation expense-equipment      $12,814

Credit            Accumulated depreciation-equipment      $12,814

D. Debit     Depreciation expense-professional library     $6,407

Credit            Accumulated depreciation-professional library      $6,407

E. Debit      Unearned revenue             $5,600

Credit             Service revenue                          $5,600

<em>Note: Monthly fee of $2,800 from November to December. Therefore, 2 months fee = $2,800*2 = $5,600 has been earned.</em>

Req. F, G and H

F. Debit      Accounts receivable         $8,750

Credit                   Service revenue                    $8,750

<em>Note: As WTI has not yet received any payment from October 15 to December 31, there will be 2 and a half months bill due. Each month = 3,500. Therefore, 2 months = $7,000, and a half-month = $(3,500 ÷ 2) = $1,750. Total receivable = $7,000 + $1,750 = $8,750.</em>

G. Debit    Salaries expense          $400

Credit                  Salaries payable            $400

<em>Note: As there are two employees and two days salary have been accured, total salaries payable = $100 per day × 2 employees × 2 days = $400</em>

H. Debit     Rent Expense           $2,062

Credit               Prepaid rent                    $2,062

7 0
3 years ago
Need help contact me!
Oliga [24]

Answer:

you need help in what???

7 0
3 years ago
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What is the meaning or moral standard?
erik [133]

Answer:

A moral standard refers to the norms which we have about the types of actions which we believe to be morally acceptable and morally unacceptable. Specifically, moral standards deal with matters which can either seriously harm or seriously benefit human beings.

Explanation:

may this answer is helpful for you

6 0
2 years ago
Anyone has documents about the increasing importance of global production networks in the textile and clothing industry?
svetoff [14.1K]

Answer:

The Global Textile and

Garments Industry:

The Role of Information

and Communication

Technologies (ICTs)

in Exploiting the

Value Chain

Information and Communication

Technology (ICT) has an important role

to play as developing countries adjust

to the new era. These opportunities will

derive from the ability of ICTs to open

up parts of the supply chain (other than

basic manufacturing and processing)

to developing countries. This report

presents case studies of companies that

have successfully used ICTs to move,

for example, into higher-value activities

such as design and logistics, or to

access niche markets

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3 years ago
Which of these statements is correct with regard to the implementation of marketing objectives?
xz_007 [3.2K]

Answer:

B). A lot of ongoing communication is involved when executing a plan.

Explanation:

The second statement regarding 'a lot of ongoing communication is involved when executing a plan' is the most correct regarding the implementation of marketing objectives. <u>Effective communication is the most significant key to ensure that the plans are timely and efficiently executed, the tasks are divided and coordinated significantly, and the desired goals and objectives are achieved successfully</u>. Thus, <u>option B</u> is the correct answer.

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2 years ago
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