1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
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.

You might be interested in
The debt-GDP ratio: Please choose the correct answer from the following choices, and then select the submit answer button. Answe
kodGreya [7K]

Answer:

rises whenever the debt rises

Explanation:

The Debt to GDP ratio is a financial metric that compares the debt of a country to its GDP It measures the ability of a country to repay its debt using its GDP

Debt is the total money a country owes to its lenders

Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year

GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export

Debt to GDP ratio = total debt of country / total GDP of a country

If total debt = $50 million and total GDP = 100 million

Debt GDP ratio = $50 million / $100 million = 0.5

the higher Debt is, the higher the ratio. The lower debt is, the lower the ratio

6 0
3 years ago
Suppose the central bank implements expansionary monetary policy where the money supply increases. Which of the following will t
natka813 [3]

Answer:

D they both will increase

Explanation:

Goodluck on that.

4 0
2 years ago
Gambrinus is a large company that owns and operates the breweries that produce Moosehead Lager, Bridgeport Ale, Pete's Wicked Al
svlad2 [7]

Answer:

The answer is departmentalization by product.

Explanation:

Departmentalization refers to the divisions of different work areas. Each one specializes in a specific job, most companies use departmentalization and train their employees, making them specialists in their role.

The main objective of departmentalization is to specialize in activities and facilitate processes while maintaining control in the organization. The departmentalization is usually divided by product, function, process, project, clients, and territory.

For example, in the case of departmentalization by-products, it is used by large companies to divide the area where the product is developed and those in charge of product delivery, thus obtaining better control, organization, and production.

<em>I hope this information can help you.</em>

7 0
3 years ago
Given the following data, calculate the total product cost per unit under variable costing. Direct labor $ 3.50 per unit Direct
labwork [276]

Answer:

$7.05

Explanation:

Given that

Direct labor = $3.50 per unit

Direct material = $1.25 per unit

Variable overhead = $41,400

Total fixed overhead = $150,000

Produced units = 18,000

The computation of total product cost per unit under variable costing is shown below:-

Total Variable overhead = Variable overhead ÷ Produced units

= $41,400 ÷ $18,000

= $2.3

Total product cost per unit = Direct labor + Direct material + Total variable overhead

= $3.50 + $1.25 + $2.3

= $7.05

3 0
3 years ago
What are the two risk components that determine a firm's cost of equity?
Yanka [14]

Traditionally, the formulas used to express a firm's cost of equity are the dividend capitalization model and the capital asset pricing model (CAPM).

Explanation:

Generally, two risk components determine a firm's cost of equity. The first is the systematic risk associated with the broader equity market. All firms are exposed to this risk, and it cannot be mitigated through diversification.

The second risk component is the unsystematic risk associated with the firm in question. This risk, often reflected as beta, a measure of the stock's volatility in relation to the volatility of the broader market, can be mitigated via diversification.

5 0
3 years ago
Other questions:
  • Think of a time you encountered an ethical dilemma. What was the situation? How did you react? Do you behave ethically? How do y
    13·1 answer
  • "No one questions the use of the auto for transporting groceries, getting to one’s place of work or to the golf course, or in pl
    9·1 answer
  • In which document can the project manager (pm) find guidance for implementing earned value management (evm) contract management
    7·1 answer
  • The ppt slides suggest the use of control charts and using deming's ideas of quality control to help with the management of asth
    7·1 answer
  • suppose dave's discount merchandise inventory account showed a balance of 8000 before the year end adjustments. The physical cou
    13·1 answer
  • A government makes a contribution to its pension plan in the amount of $10,000 for year 1. The actuarially-determined annual req
    12·1 answer
  • Costing the type of job costing​
    15·1 answer
  • What are the differences between the​ long-run equilibrium of a perfectly competitive firm and the​ long-run equilibrium of a mo
    12·1 answer
  • At year-end (December 31), Chan Company estimates its bad debts as 0.80% of its annual credit sales of $654,000. Chan records it
    14·1 answer
  • trighton's trailer co. sells all kinds of trailers and provides a one-year warranty on all new trailer sales. based on history,
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!