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ipn [44]
2 years ago
10

The Wet Corp. has an investment project that will reduce expenses by $25,000 per year for 3 years. The project's cost is $20,000

. If the asset is part of the 3-year MACRS category (33.33% first year depreciation) and the company's combined tax rate is 25%, what is the cash flow from the project in year 1? (Do not round intermediate calculations. Round your answer to the nearest dollar amount.) $19,866 $21,196 $20,416 $21,876
Business
1 answer:
Jlenok [28]2 years ago
8 0

Answer:

c. $20,416.50

Explanation:

Cost of assets = 20,000

Depreciation year 1 = 33% * 20,000 = $6,666

Annual cost saving = 25,000

Tax rate = 25%

Operating cash flow Year 1 = Cost saving*(1 - tax) + Tax*Depreciation

Operating cash flow Year 1 = 25,000*(1-0.25) + 0.25*6,666

Operating cash flow Year 1 = 25,000*0.75 + 0.25*6,666

Operating cash flow Year 1 = 18750 + 1666.5

Operating cash flow Year 1 = $20,416.5

So, the cash-flow from the project in year 1 is $20,416.50

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Assume that on July 1, 2018, Togo's Sandwiches issues a $2.97 million, one-year note. Interest is payable at maturity.
allsm [11]

Answer:

7% interest at Cec-31 for 6 months:

Dr Interest  expense(7%*$2,970,000*6/12) $ 103,950

Cr Interest payable                                                          $103,950

9% interest at Sept 30 for 3 months:

Dr Interest  expense(9%*$2,970,000*3/12) $66,825

Cr Interest payable                                                          $66,825

6% interest at Oct 31 for 4 months:

Dr Interest  expense(6%*$2,970,000*4/12) $ 59,400

Cr Interest payable                                                          $59,400

8% interest at Jan 31 for 7 months:

Dr Interest  expense(8%*$2,970,000*7/12) $138,600  

Cr Interest payable                                                          $ 138,600

Explanation:

The rationale for debiting interest expense is that is an expense account and increase in expense is normally debited to expense account while interest payable account is credited as the interest obligations are yet discharged by a way of paying cash to investors

5 0
3 years ago
Here is the ledger for Blossom Company.
Alex777 [14]

Answer:

1/Oct : Cash (Dr.) $8,660

Accounts Receivable (Cr.) $8,660

10/Oct : Equipment & Supplies (Dr.) $9,660

Notes Payable (Cr.) $9,660

20/Oct : Accounts Receivable (Dr.) $2,640

Service Revenue (Cr.) $2,640

Explanation:

Debits $16,960

Cash 6,600

Accounts Receivable 1,840

Supplies 1,840

Equipment 4,660

Dividend 2,020

Credits : $16960

Accounts Payable 4,660

Notes Payable 9,660

Service Revenue 2,640

3 0
3 years ago
PLEASE HELP :(
DedPeter [7]

Answer:

A transaction that involves the investment of cash in a business is debited because

1) For a business to invest cash for their expansion, involves the reduction of finances in the available revenue or profit for the purchase of equipment, property and software for internal use, for which money has to be drawn, which is a form of b=debit

2) For an owner investing money into his business, is taken as an increase in the amount the business owes the owner, which is equivalent to amount owed the owner which has to be recorded as a debit for financial accounting

Explanation:

3 0
2 years ago
Leas Corporation staffs a helpline to answer questions from customers. The costs of operating the helpline are variable with res
elena-14-01-66 [18.8K]

Answer:

d. $432,590

Explanation:

In this scenario cost varies with volume of calls. This is called variable cost and is defined as cost that changes as the quantity of goods and services changes. Variable cost is a summation of all the marginal costs of units produced. They rise as production increases and vice versa.

To calculate the variable cost= Total cost/ volume

Variable cost= 452,500/25,000

Variable cost= $18.10

At a new volume of $23,900

Total cost= Variable cost * Volume

Total cost= 18.1* 23,900

Total cost= $432,590

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Which is a benefit of entrepreneurship?
Dmitrij [34]
I I’m not sure but I think B
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