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liubo4ka [24]
3 years ago
11

A proposed new project has projected sales of $175,000, costs of $93,000, and depreciation of $24,800. The tax rate is 23 percen

t. Calculate operating cash flow using the four different approaches. (Do not round intermediate calculations.)
Business
1 answer:
allochka39001 [22]3 years ago
6 0

Answer and Explanation:

Sales                            = $175,000

Less: Cost                    = $93,000

Gross Profit                  = $82,000

Less: Depreciation       = $24,800

EBT                                = $57,200

Less: Tax [email protected]%    = $13,156

EAT                                 = $44,044

a). OCF = EBIT + Depreciation - Taxes

             = $57,200 + $24,800 - $13,156

             = $68,844

b). OCF = [(sales - costs - Depreciation) * (1 - T)] + Depreciation

             = [($175,000 - $93,000 - $24,800) * (1 - 0.23)] + $24,800

             = $68,844

c). OCF = [(sales - costs) * (1 - T)] + [Depreciation * T]

             = [($175,000 - $93,000) * (1 - 0.23)] + [$24,800 * 0.23]

             =  $68,844

d). OCF = Net income + depreciation

             = $44,044 + $24,800

             = $68,844

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Answer:

(C) Arrange for the alliance to be managed at the corporate level.

Explanation:

The correct answer is C. The managers and owners of American Snacks Inc., should arrange the alliance to be managed at corporate level. If the alliance will be managed at the corporate level decisions will affect the whole company. The corporate level strategy is designed by American Snacks Inc. to form a strategic alliance with Tres Bien Limite. The managers of Tres Bien Limite should be responded by American Snacks Inc. with the corporate level alliance management.

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3 years ago
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Let's try to determine the cost function for another company like ABC who makes sausages. Assume costs are as follows:
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Answer:

$3.30 per pound

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