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
kolbaska11 [484]
3 years ago
11

Chevron Phillips (CP) has put into place new laboratory equipment for the production of chemicals; the cost is $1,770,000 instal

led. CP borrows 48% of all capital needed, and the borrowing rate is 13.4%. In the 1st year, 25% of the principal borrowed will be paid back. The throughput rate for in-process test samples has increased the capacity of the lab, saving a net of $X per year. In this 1st year, depreciation is $362,000 and taxable income is $329,000.
Required:
a. What is the gross income or annual savings?
b. Determine the income tax for the 1st year assuming a marginal tax rate of 40%.
c. What is the after-tax cash flow for the 1st year?
Business
1 answer:
inessss [21]3 years ago
6 0

Answer:

Chevron Phillips (CP)

a. The gross income or annual savings is:

= $804,846.

b. The income tax for the 1st year assuming a marginal tax rate of 40% is:

= $131,600.

c. The after-tax cash flow for the 1st year is:

= $559,400.

Explanation:

a) Data and Calculations;

Cost of new laboratory equipment = $1,770,000

Borrowed capital = $849,600 ($1,770,000 * 48%)

Borrowing rate = 13.4%

Borrowing interest expense for the first year = $113,846

Depreciation = $362,000

Taxable income = $329,000

Gross savings = $X

$X = $804,846 ($113,846 + $362,000 + $329,000)

Income tax for the 1st year:

Marginal tax rate = 40%

Taxable income = $329,000

= $131,600 ($329,000 * 40%)

After-tax Cash Flows for the 1st year:

Gross savings =    $804,846

Interest expense      113,846

Depreciation          362,000

Taxable income  $329,000

Income tax              131,600

Net income          $197,400

Cash Flows:

Net income               $197,400

Depreciation             362,000

After-tax cash flow $559,400

You might be interested in
If W. Edwards Deming was your management consultant, he would emphasize
VARVARA [1.3K]

Answer:

Letter A. <u>Quality through constant innovation and quality assurance training.</u>

Explanation:

Alternative A is correct, as W. Edwards Deming was a pioneer scholar in the application of organizational quality management.

He was responsible for creating the 14 points, which are principles for management that will help the organization to achieve total quality. He was also responsible for popularizing the PDCA Cycle (PLAN, DO, CHECK, ACT), which is a strategic tool widely used worldwide to ensure continuous improvement and the quality of processes and products.

  • PLAN:  define objectives, methods and resources.
  • DO: Perform, educate and train.
  • CHECK: Measure and evaluate
  • ACT:  act correctly.

Continuous improvement can be achieved through the correct and targeted use of the PDCA cycle towards organizational objectives. For Deming, without continuous improvement, there is no survival of the organization in the market, so he argues that continuous improvement must be implemented in all phases of the project, to achieve the benefits of continuous improvement of processes, increased productivity and reduced costs.

4 0
3 years ago
What process guides your entry and closing points? 1. Reducing the randomness of your approach 2. Pragmatic 3. Facilitate adapta
Airida [17]

Answer:

1. Reducing the randomness of your approach

Explanation:

Reducing the randomness of your approach guides your entry and closing points

8 0
2 years ago
What is the average life expectancy for a paraplegic?
Korolek [52]

Paraplegic is set to manifest in an individual if the person has paralysis on both of his or her lower limbs and the cause of this is likely because of an injury or spinal disease. The life expectancy of a person who has this illness is not definite because early than 18 months, there is already death within individuals who has this disease. But base on researches, its life expectancy is 18 months.

3 0
3 years ago
_____ is a process that helps organizations identify, select, organize, disseminate, transfer, and apply expertise that are part
Drupady [299]
The right answer for the question that is being asked and shown above is that: "E. Online analytical processing" It is a process that helps organizations identify, select, organize, disseminate, transfer, and apply expertise that are part of the organization’s memory and typically reside inside the organization in an unstructured manner. This is called the o<span>nline analytical processing</span>
3 0
3 years ago
What is the difference between a shortage and a scarcity?
Nata [24]
Based on economic theory, scarcity is limitation of a resource which cannot be replenished. Shortage is used to indicate a market condition.
When applying this definition to your question, A is your answer.
6 0
3 years ago
Other questions:
  • Wizards are step-by-step guides for tasks in application software
    13·1 answer
  • The total manufacturing cost variance is a.the flexible budget variance plus the time variance b.the difference between planned
    6·1 answer
  • Linda is a qualifying widow in 2018. In 2018, she reports $80,000 of taxable income (all ordinary). What is her gross tax liabil
    5·1 answer
  • Production and sales estimates for April are as follows: Estimated inventory (units), April 19,000 Desired inventory (units), Ap
    10·1 answer
  • Mattel Inc.’s 2016 financial statements show operating profit before interest and tax of $519,233 thousand, net income of $318,0
    11·1 answer
  • Which act prohibits an employer from paying an employee of one gender less money than an employee of the opposite gender where t
    15·1 answer
  • The Framework Company refurbishes antique French purses with silk, satin, and jade trimmings. The bags are its only product. The
    15·1 answer
  • ​wheels, inc. manufactures wheels for​ bicycles, tricycles, and scooters. for each cost given​ below, determine if the cost is a
    12·1 answer
  • If I am starting a restaurant and taking all the risk, I am a ________.
    14·1 answer
  • Dragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $57,000, and the
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!