2) A hydraulic crane service company had sales revenue of $2,250,000 from operations during tax-year 1. The following table provides other financial information relating to the tax year: Labor expenses Materials costs Depreciation expenses Interest expenses Rental expenses Proceeds from sale of old equipment with a book value of $20,000 How much is the taxable income? $550,000 $385,000 $132,500 $22,200 $45,000 $23,000 a. If the federal tax rate is 21% and the state tax rate is 10%, determine the combined tax rate (do not include the % sign in your answer) b. Calculate the Before-Tax net Cash Flow (BTCF) of the company
2) A hydraulic crane service company had sales revenue of $2,250,000 from operations during tax-year 1. The following table provides other financial information relating to the tax year: Labor expenses Materials costs Depreciation expenses Interest expenses Rental expenses Proceeds from sale of old equipment with a book value of $20,000 How much is the taxable income? $550,000 $385,000 $132,500 $22,200 $45,000 $23,000 a. If the federal tax rate is 21% and the state tax rate is 10%, determine the combined tax rate (do not include the % sign in your answer) b. Calculate the Before-Tax net Cash Flow (BTCF) of the company
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:2) A hydraulic crane service company had sales revenue of $2,250,000
from operations during tax-year 1. The following table provides other financial
information relating to the tax year:
Labor expenses
Materials costs
Depreciation expenses
Interest expenses
$22,200
Rental expenses
$45,000
Proceeds from sale of old equipment with a $23,000
book value of $20,000
How much is the taxable income?
$550,000
$385,000
$132,500
a. If the federal tax rate is 21% and the state tax rate is 10%, determine
the combined tax rate (do not include the % sign in your answer)
b. Calculate the Before-Tax net Cash Flow (BTCF) of the company
C. Calculate the after-tax net cash flow (ATCF) of the company
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