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Ostrovityanka [42]
3 years ago
5

A proposed new project has projected sales of $195,000, costs of $92,000, and depreciation of $25,200. The tax rate is 25 percen

t. Calculate operating cash flow using the four different approaches. (Do not round intermediate calculations.)
Operating cash flow
EBIT +Depreciation - Taxes 58,800
Top-down
Tax-shield
Bottom-up
Business
1 answer:
rusak2 [61]3 years ago
5 0

Answer:

EBIT + Depreciation - Tax

= (195000-92000-25200) + 25200 - 19450

= $83,550

Top down OCF = EBIT - (EBIT * Tax) + Depreciation  

Top down OCF = (195000-92000-25200) - ((195000-92000-25200) * 0.25) +25200

Top down OCF = 77800 - 19450 + 25200

Top down OCF = $83,550

Tax shield OCF = (Sales - Exp) (1-tax) + (Dep * tax)  

Tax shield OCF = (195000-92000) (1-0.25) + (25200 * 0.25)  

Tax shield OCF = 77250 + 6300

Tax shield OCF = 83550

Bottom Up OCF = Net Income + Dep

Bottom Up OCF = (77800 * (1-0.25) + 25200

Bottom Up OCF = 83550

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Reshoring.

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Krell Industries has a share price of $ 21.05 today. If Krell is expected to pay a dividend of $ 0.89 this year and its stock pr
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Krell's dividend yield and equity cost of​ capital are 4.23% and 19.95%

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Dividend yield = expected dividend/price today

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Lindsay​ Electronics, a small manufacturer of electronic research​ equipment, has approximately 6 comma 800 items in its invento
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