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photoshop1234 [79]
3 years ago
13

A firm is considering taking a project that will produce $12 million of revenue per year. Cash expenses will be $5 million, and

depreciation expenses will be $1 million per year. The project would also reduce the cash revenues of an existing project by $2 million. What is the free cash flow on the project, per year, if the firm is in the 40 percent marginal tax rate?
Business
1 answer:
hammer [34]3 years ago
4 0

Answer:

$3.4 million

Explanation:

The computation of the free cash flow is shown below:

= EBIT × (1 -Tax Rate) + Depreciation & Amortization

where,

EBIT = Revenues - reduced amount of cash revenues - cash expenses - depreciation

= $12 million - $2 million - $5 million - $1 million

= $4 million

All other items values would remain the same

Now put these values to the above formula  

So, the value would equal to

= $4 million × ( 1 - 40%) + $1 million

= $2.4 million + $1 million

= $3.4 million

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A broker, acting as the agent of a seller, must deal honestly and fairly with whom? Group of answer choices
Doss [256]

Answer:

Everyone involved in the transaction

Explanation:

As an agent of the seller, the broker has a fiduciary duty with the seller (principal) to act of behalf of his/her best interest.

But the broker must also act honestly with the buyer, if the broker closes a deal using dishonest or unfair practices, e.g. forging documents, then the buyer might claim damages from both the broker and the seller.

And of course the broker should also make sure that his/her own rights are respected and his/her work is properly paid.  

8 0
4 years ago
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3 years ago
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8 0
3 years ago
Given a reserve requirement of 12.5%, a bank currently meets their reserve requirements with $15,000,000 in excess reserves. If
STatiana [176]

Answer:

1.5%

Explanation:

Reserves is the total amount of a bank's deposit that is not given out as loans  

Required reserves is the percentage of deposits required of banks to keep as reserves by the central bank  

Excess reserves is the difference between reserves and required reserves

Total increase in reserve = $15,000,000 + $1,800,000=  $16,800,000

New excess reserve = total increase in reserve x initial reserve requirement) / initial excess reserve

($16,800,000 x 12.5%) / $15,000,000 = 14%

Increase in reserve requirement = 14% - 12.5% = 1.5%

8 0
3 years ago
Which of the following is not a typical adjustment made to the income statement for projection purposes?
ankoles [38]

Answer:

The correct answer is b. Adjusting revenues to only include organic revenue growth.  

Explanation:

One of the quantitative planning techniques is the projection of financial statements or also called pro forma statements.

The applications that can be had among others are the following:

Know how the year will end for tax purposes in terms of income and deductions in order to make decisions before the end of the year.

Another application will be to know the external financing needs for the period you want to know.

The most common and practical method of projecting financial statements is based on sales.

7 0
4 years ago
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