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arlik [135]
3 years ago
13

A proposed new project has projected sales of $132,000, costs of $66,000, and depreciation of $13,500. The tax rate is 30%. Calc

ulate operating cash flow using the four different approaches. (Do not round intermediate calculations.)
Approaches:
EBIT + Depreciation - Taxes
Operating cash flow $ _____
Top-down
Operating cash flow $ _____
Tax-shield
Operating cash flow $ _____
Bottom-up
Operating cash flow $ _____
Is the answer the same in each case? Yes or No?
Business
1 answer:
Verizon [17]3 years ago
4 0

Answer:Operating cash flow $ _50,250__

Yes, the answer is same in each case

Explanation:

a)   EBIT + Depreciation - Tax

= ($132,000-$66,000-$13,500) + $13,500 - Tax

= $52,500 + $13,500-(30% x $52,500)

=$52,500 + $13,500-15,750

EBIT + Depreciation - Tax=$50,250

b)Top down OCF = EBIT - (EBIT x Tax) + Depreciation  

Top down OCF = $52,500  - ($52,500 x 30%) +  $13,500  

Top down OCF = $52,500 -15,750 + $13,500

Top down OCF =$50,250

Tax shield OCF =(Sales - Cost)(1-t) + Depreciation (t)

Tax shield OCF = ($132,000-$66,000) (1-0.30) + ($13,500 x0.30)  

Tax shield OCF =$66,000 x 0.7 + 4,050

Tax shield OCF = 46,200+ 4,050

Tax shield OCF = $50,250

Bottom Up OCF = Net Income + Dep

Bottom Up OCF =($132,000-$66,000-$13,500 ) - Tax ) + Dep

Bottom Up OCF = $52,500-(0.3 x $52,500 )+ $13,500

Bottom Up OCF = $52,500 -15,750 + $13,500

Bottom Up OCF =$50,250

2. Yes, the answer is same in each case

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Answer:

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Explanation:

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7 0
3 years ago
A company's sales in Seattle were $410,000 in 2012, while their sales in Portland were $290,000 for the same year. Complete the
REY [17]

Answer:

a)   41.38%

b)  29.26%

c)  70.73%

Explanation:

We should check agsint whom is the comparrison to deteminate the base.

If we compare "than Portland's" this means portland is the year base.

a) Seattle / Portland

410,000 / 290,000 - 1 = 41.3793 = 41.38%

b) 1 - Portland / Seattle  = 1 - 290,000/410,000 = 29.26%

c) Portland / Seattle = 290,000 / 410,000 = 70.7317%

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3 years ago
I NEED HELP ASAP!!!!
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Answer:

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3 years ago
Western company begins the year with $50,000 of inventory on hand. During 2018, western purchases additional inventory for $100,
slava [35]

Answer:

Debit cost of goods sold $40,000

Explanation:

As with the details of inventory we have:

Opening value of inventory = $50,000

Purchases = $100,000

Thus, total inventory = $150,000

On the closing date we have the balance of inventory in hand = $110,000

Therefore, cost of goods sold = Total inventory - Closing

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Cost of goods sold is an expense, and shall be debited.

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3 years ago
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