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Sliva [168]
3 years ago
12

Edwards Electronics recently reported $11,250 of sales, $5,500 of operating costs other than depreciation, and $1,250 of depreci

ation. The company had no amortization charges, it had $3,500 of bonds that carry a 6.25% interest rate, and its federal-plus-state income tax rate was 35%. How much was its net cash flow?
Business
1 answer:
olasank [31]3 years ago
3 0

Answer: $4032.85

Explanation:

The following can be derived based on the information in the question:

Sales = $11,250

Less: operating cost = $5,500

Less: depreciation = $1,250

Operating income = $4500

Operating income = $4500

Less: Interest charges = $218.75

Taxable income = $4281.25

Taxable income = $4281.25

Less: Taxes = $1498.4

Net income = $2782.85

Net cash flow = Net Income + Depreciation

= $2782.85 + $1250

= $4032.85

N.B:

Interest charges= 6.25% × $3500

= 0.0625 × $3500

= $218.75

Taxes = 35% × $4281.25

= 0.35 × $4281.25

= $1498.4

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On April 2, 2018, Montana Mining Co. pays $3,721,000 for an ore deposit containing 1,525,000 tons. The company installs machiner
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Answer:

Dep expense 428,796

    Acc Depp Machine 23,268

    Acc dep deposit 405,528

Explanation:

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3,721,000 ore deposit

166,200/1,525,000 = 0.108983606

213,500 x 0.108983606 = 23,268

3,721,000 x 0.108983606 = 405,528

8 0
3 years ago
A 10-year 4 3/4% Treasury Note is quoted at 95-11 - 95-15. The note pays interest on Jan 1st. and Jul. 1st. A customer buys 10M
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Answer:

The customer will pay, disregarding commissions and accrued interest $9,546.88 .

Explanation:

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The Treasury Note is quoted at 95-11 - 95-15

In this case A customer will buy at ask price, which is 95 and 15/32 nds = 95.46875%

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4 years ago
The discount rate is the interest rate on loans that the Federal Reserve makes to banks. Banks occasionally borrow from the Fede
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Answer:

Explanation:

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3 years ago
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