LO 24. Calculating OCF Consider the following income statement:Sales$537,200Costs346,800Depreciation94,500EBIT?Taxes (21%)?Net incomeFill in the missing numbers and then caicrlate e F What is the depreci-ation tax shield?5. Calculating Depreciation A piece of new pequipment

EBIT is calculated as sales less costs and depreciation. Taxes are calculated on EBIT and net income…

Answered: 4. Calculating OCF Consider the…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Pleas calculate the AVERAGE and MARGINAL TAX based on the tax bracket provided below. (Hint: every box in the table may NOT be used.) $0 $1,001 $3,001 Tax Bracket $10,001 $20,001 $40,001 $1,000 $3,000 $10,000 $20,000 $40,000 & Above Average Tax:__`17.729% Marginal Tax:__`25¹% Tax 5% 10% 15% 25% 30% 45% $ $ Taxable Income Amount Taxed type your ansv type your ansv type your ansv = type your ansv $16,500 $ $ $ $ Actual Tax Paid type your answe type your answe type your answe type your answe type your answe Amount Remaining $ $ $ $ type your answe type your answe type your answe type your answe
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Pertinent information for two alternatives A and B is shown below. If i=10 % / year and the effective income tax rate is 35%, answer the following true/false questions. Alt. A Alt.B 150,000 225,000 100,000 100,000 30,000 10,000 15,000 22,500 ADS-6: Years Recovery Period GDS: 5-Years Recovery Period Basis, $ Gross Income (Gl), $ Operating Expense (OE), $ Salvage Value, $ MARCS Depreciation Method The CFAT at the end of year 7 for Alt. A is less than $50,000. True O False
Q9. Pertinent information for two alternatives A and B is shown below. If i=10%/year and the effective income tax rate is 35%, answer the following true/false questions. Alt. A Alt.B Basis, $ 150,000 225,,000 Gross Income (GI), $ 100,000 100,000 Operating Expense (OE), $ 30,000 10,000 Salvage Value, $ 15,000 22,500 MARCS Depreciation Method ADS-6: Years Recovery Period GDS: 5-Years Recovery Period The TI (taxable income) of Alt. B at the end of year 1 is $45,000. Group of answer choices True False
Instructions Consider an organization that has Earnings Before Tax of $100,000. Assume amortization expense for this organization is zero, and it is in the 30% tax bracket. Answer the following questions: 1. What is the cash flow? 2. Now assume amortization is $50,000. Does the cash flow change? If so, why and by how much? Requirements Your submission should include a single Microsoft Word document or pdf containing your response to the discussion question. S
Problem 1-29 (ACP) is 30% of income after bonus. Required: Determine the bonus under each of the following independent assumptions: 2. Bonus is a certain percent of income after bonus but before tax. 3. Bonus is a certain percent of income after bonus and after tax. 4. Bonus is certain percent of income after tax but before bonus
Pertinent information for two alternatives A and B is shown below. If i=10% / year and the effective income tax rate is 35%, answer the following true/false questions. Alt. A Alt.B Basis, $ Gross Income (GI), $ Operating Expense (OE), $ Salvage Value, $ MARCS Depreciation Method O True 150,000 100,000 30,000 O False 225,,000 100,000 10,000 The depreciation charge at the end of year 7 for Alt. A is zero. 15,000 22,500 ADS-6: Years Recovery GDS: 5-Years Recovery Period Period
Fill in Xs'
Fill in the missing numbers for the following income statement. (Do not round intermediate calculations.) Sales Costs Depreciation EBIT Taxes (24%) Net income b. b. Calculate the OCF. (Do not round intermediate calculations.) c. What is the depreciation tax shield? (Do not round intermediate calculations.) C. $ OCF 662,600 424,300 100,700 Depreciation tax shield
EBIT is $12,000 and interest expense is $3,000. If the tax rate is 20%, what is the net income? $4,200 $9,400 $7,200 O $3,800
If an after-tax rate of return = 10% is required and the Effective tax rate is 35%. What is the estimated MARR for before tax economic analysis. Select one: a. 13.4 % b. 19.4 % c. 17.4 % d. 15.4 %

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4. Calculating OCF Consider the following income statement! $537,200 346,800 Sales Costs Depreciation 94,500 EBIT Taxes (21%) ? Net income Fill in the missing numbers and then caicrlate o F What is the depreci- ation tax shield?