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liraira [26]
3 years ago
15

Tubby Toys estimates that its new line of rubber ducks will generate sales of $7.20 million, operating costs of $4.20 million, a

nd a depreciation expense of $1.20 million. If the tax rate is 30%, what is the firm’s operating cash flow?
a. Calculate the operating cash flow for the year by using all three methods:
(a) adjusted accounting profits;
(b) cash inflow/cash outflow analysis; and
(c) the depreciation tax shield approach. (Enter your answers in millions rounded to 2 decimal places.) Method Cash Flow Adjusted accounting profits $ million Cash inflow/cash outflow analysis million Depreciation tax shield approach million
Business
1 answer:
mixer [17]3 years ago
8 0

Answer:

$2.46 million.

Explanation:

Profit before tax:

= Sales - Variable costs - Depreciation

= $7.20 - $4.20 - $1.20

= $1.80 million

Net income = Profit before tax - Tax

                   = $1.80 million - (30% × $1.80)

                   = $1.80 million - $0.54 million

                   = $1.26 million

(1) Adjusted accounting profits method:

= Net income + Depreciation

= $1.26 + $1.2

= $2.46 million

(2) Cash inflow/Cash outflow method:

= Sales - Cash expenses - Tax

= 7.2 - 4.2 - 0.54

= $2.46 million

(3) Depreciation tax shield method:

= [(Sales - Costs) × (1-Tax rate)] + (Depreciation × Tax rate)

= [(7.2 - 4.2) × (1 - 30%)] + (1.20 × 30%)

= $2.46 million

Therefore, operating cash flow from all the three method is $2.46 million.

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Stone Company has beginning equity of $1,200,000, net income of $200,000, dividends of $120,000 and investments by owners in exc
meriva

Answer:

The correct answer is D. $1,320,000 .

Explanation:

In this case, it should be considered that the Stone Company is just beginning to operate, so the capital at the end of the period is made up of the following:

Initial Capital: $ 1,200,000

Dividends: $ 120,000

TOTAL = $ 1,320,000

Net income is not part of the measurement of capital, since information on expenses must be available to calculate the profit or loss for the period. For its part, investments in shares are considered a current asset and do not enter into this calculation.

4 0
3 years ago
A firm that has recently experienced an enormous growth rate is seeking to lease a small plant in Memphis, TN; Biloxi, MS; or Bi
azamat

Answer:

Memphis $170,000

Biloxi $160,000

Birmingham $175,000

Explanation:

Preparation of an economic analysis of the three locations

Memphis economic analysis using this formula.

Economic analysis=(Building, equipment, administration costs+Increased transportation costs+(Expected volume *Labor and materials per units)

Let plug in the formula

Memphis Economic Analysis = $40,000 + $50,000 + (10,000 units *$8/unit )

Memphis Economic Analysis = $40,000 + $50,000 + $80,000

Memphis Economic Analysis = $170,000

Therefore Memphis Economic Analysis is $170,000

Preparation of Biloxi Economic Analysis

Biloxi Economic Analysis = $60,000 + $60,000 + (10,000 units *$4/unit )

Biloxi Economic Analysis = $60,000 + $60,000 + $40,000

Biloxi Economic Analysis = $160,000

Therefore Biloxi Economic Analysis is $160,000

Preparation of Birmingham Economic Analysis

Birmingham Economic Analysis = $100,000 + $25,000 + (10,000 units *$5/unit )

Birmingham Economic Analysis = $100,000 + $25,000 + $50,000

Birmingham Economic Analysis = $175,000

Therefore Birmingham Economic Analysis is $175,000

Therefore the summary of the economic analysis of the three locations are:

Memphis $170,000

Biloxi $160,000

Birmingham $175,000

5 0
3 years ago
Daily demand for newspapers for the last 10 days has been as follows: 12, 13, 16, 15, 12, 18, 14, 12, 13, 15 (listed from oldest
katrin [286]

Answer:

The correct option is E,14

Explanation:

In using the two-day moving average to forecast for the next day sales, the previous two days sales are taken , summed to up and finally averaged(that is divided by 2)

Next day forecast=sum of previous two days sales figures/number of days

sum of previous two days  forecast=13+15=28

since the number of the days is 2 ,the 8 is divided by 2,28/2=14

Ultimately the next day forecast sales figure is 14 newspapers

Option A is wrong that is just considering of the two previous day, the same thing applies to option B.

Option C is the sum of previous two days sales without being divided

5 0
3 years ago
Feedback is important in improving your performance, and we should solicit feedback, and not just wait until someone provides us
Serhud [2]

Answer:

The given statement is "True".

Explanation:

  • Feedback would be a significant aspect in improving the accomplishment or organization's success.
  • Requesting or waiting for such feedback might contribute to less and less input, although the organization must request for input, this same person might communicate with the organization by requesting comments.

Thus the above is the correct answer.

8 0
3 years ago
An irate caller reaches you and starts berating your company’s service on a particular product that has been controversial. You
inn [45]

Answer:

B. Listen carefully to the caller, take their number, and promise to get the appropriate person to call back to resolve any issues.

Explanation:

This can be a stressful situation but according to some researchers, it is important that companies train its employees to deal effectively with this kind of situations that can happen at any time. Most important things to take into account to deal with this irate customers and keep the commercial relationship are:

1. Stay calm and don't take things personally.

2. Listen carefully and if pertinent express your apologies.

3. Stand firm and be respectful, but letting them know that there is no need to insult or be rude.

4. Solve the problem and do follow up.

8 0
3 years ago
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