Answer and Explanation:
Revenue $160,000
Rental Costs $30,000
Variable Costs $50,000
Depreciation $10,000
Profit before tax $70,000
Tax(35%) $24,500
Net Income $45,500
Operating cash flow
a) Dollars in minus dollars out
Revenue ? rental costs ? variable costs ? taxes = $160000 -$30000-$50000-$24,500 = $55,500
b) Adjusted accounting profits
Operating cash flow = Net income + depreciation = $45,500 + $10,000 = $55,500
c) Add back depreciation tax shield
Operating cash flow = [(Revenue ? rental costs ? variable costs) × (1 ? 0.35)] + (depreciation × 0.35)]
= ($160,000-$30000-$50,000)*0.65 + $10,000*0.35 = $55,500
Yes, the above approaches result in the same value for cash flow
e. Corporate dividends represent aftertax income from the corporation which becomes taxable income for the recipient.
More about dividends:
Dividend refers to a distribution of a corporation's profits to its shareholders and to use the term distribution to refer to other payments to shareholders, such as payments made when the corporation is liquidated.
Types:
- Cash the most typical and probably the most appreciated type of dividend is cash, which is typically distributed in the form of a check payable to the shareholder.
- Property dividends are the least frequent dividends declared, making them less appealing to shareholders who may not want to receive a variety of the company's goods.
- Share dividends are payments made on the corporation's shares to shareholders in proportion to their individual ownership stakes in the corporation.
Learn more about dividends here:
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Answer:
The human capital theory
Explanation
The human capital theory explores the relationship between investment in human capital and earnings.
Investment in human capital can take the form of education or training.
The theory suggest that those that invest in human capital earn higher income
The human capital theory also explores pattern of earnings. The theory suggests that the earnings of young people would be low as they would forgo earnings to invest in human capital . Earnings would increase as one gets older because old people invest less in education and training
Answer:
Answer is in table which is attached in the attachment. Please refer to the attachment.
Explanation:
<em>Calculations:</em>
Status quo: Revenue 30* 200= 6000, VC 30*20= 4000, CM 6000-4000= 2000, 2000-3000= -1000 (Contribution Margin – fixed cost = Profit/Loss)
(b) Since the loss is less in Advertising even after $300 cost of advertisement, so we would choose the option 3 for advertising.
(c). In order to survive in the period of recession, a business needs cash and reducing operation expenses can do it better. This business is in loss from last three months so it might be useful to shut down the business for some period.
<span>a cycle or series of cycles of economic expansion and contraction.</span>
