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.
Answer and Explanation:
The Preparation of horizontal analysis for 2022 using 2021 as the base year is prepared with the help of a spreadsheet.
Horizontal analysis is a method for the analysis of financial statements that indicates fluctuations in the amount of the related products over a period of time. It is a valuable instrument for determining trend situations.
So, with the help of the spreadsheet, we will be able to find the net income by using the formulas.
Answer:
The value of the firm's stock is $703,920
The price is $5.63 per share ($703,920/125,000 shares)
Explanation:
a) Data and Calculations:
Free cash flows = $200,000
Present value of the free cash flows = $200,000 x Annuity Factor, for 5 years at cost of capital of 15% x (1 + growth rate)
= $200,000 x 3.352 x 1.05
= $703,920
Therefore, common equity = $703,920
To calculate Company XYZ's free cash flows in their present value, they are discounted, using the present value table. The resulting amount is equivalent to the value of the common stock. The company's free cash flow is the amount that is left after settling operating expenses and capital expenditure.
Answer:
Clark Corp.
The total deferred tax expense for year 3 should be:
= $62,500.
Explanation:
a) Data and Calculations:
Accounting depreciation expense = $300,000
Tax depreciation expense = $500,000
Temporary Difference = $200,000 ($500,000 - $300,000)
Accrued Warranty Expense 50,000
Total temporary differences = $250,000
Clark's enacted tax rate = 25%
Total deferred tax expense = $62,500 ($250,000 * 25%)
The best and most correct answer among the choices provided by your question is the second choice or letter B. They could put up a partnership which <span>might best suit their growth.
</span>
A partnership<span> is a single business where two or more people share ownership. Each </span>partner<span> contributes to all aspects of the business, including money, property, labor or skill. In return, each </span>partner<span> shares in the profits and losses of the business.</span>
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