A marketing consulting firm is evaluating a new service offering that will generate additional revenue of $42,000. The company operates with a corporate tax rate of 35%. Calculate the after-tax income from this new service offering.
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- what will be the after-tax income?A company, subject to a 25% tax rate, desires to earn P600,000 of after-tax income. How much should the firm add to fixed costs when figuring the sales revenues necessary to produce this income level?Jamison Enterprises plans to generate $720,000 of sales revenue if a capital project is implemented. Assuming a 25% tax rate, the sales revenue should be reflected in the analysis by: problem related to Accounting 21
- Hydro Systems Engineering Associates, Inc., provides consulting services to city water authorities. The consulting firm’s contribution-margin ratio is 15 percent, and its annual fixed expenses are $245,000. The firm’s income-tax rate is 30 percent.a. Calculate the firm’s break-even volume of service revenue.b. How much before-tax income must the firm earn to make an after-tax net income of $138,000?c. What level of revenue for consulting services must the firm generate to earn an after-tax net income of $138,000?d. Suppose the firm’s income-tax rate changes to 20 percent. What will happen to the break-even level of consulting service revenue?Nkusi Incorporated, provides consulting services to city water authorities. The consulting firm’s contribution-margin ratio is 20 percent, and its annual fixed expenses are $198,000. The firm’s income-tax rate is 40 percent. Required: Calculate the firm’s break-even volume of service revenue. How much before-tax income must the firm earn to make an after-tax net income of $ 55,800? What level of revenue for consulting services must the firm generate to earn an after-tax net income of $ 55,800 Suppose the firm’s income-tax rate rises to 45 percent. What will happen to the break-even level of consulting service revenue?Jamison Enterprises plans to generate $720,000 of sales revenue if a capital project is implemented. Assuming a 25% tax rate, the sales revenue should be reflected in the analysis by: Need solution
- Tally Corp. sells tax software to aid individuals in completing their state and federal tax returns. During the current year, 11,000 software packages were sold resulting in $440,000 of sales revenue, $135,000 of variable costs, and $52,000 of fixed costs. If sales increase by $100,000: Total variable costs will Increase/decrease/stay the same by $ Total fixed costs will Increase/decrease/stay the same by $ Operating income will Increase/decrease/stay the same by $You are asked to evaluate the following project for a corporation profitable ongoing operations. The required investment on January 1 of this year is $29,000. The firm will depreciate the investment at a CCA rate of 20 percent. The firm is in the 40 percent tax bracket. The price of the product on January 1 year 1 is $104 per unit. That price will stay constant in real terms. Labour costs is $14.00 per hour on January 1 year 1. Labour costs will increase by 1 percent per year in real terms after year 1. Energy costs will be $7.20 per physical unit on January 1 year 1; energy cost will increase at 2.5 percent per year in real terms after year 1. The inflation rate is 4.1 percent. The company sells all of its production in the year produced; revenue is received and costs are paid at year-end: Physical production, in units Labour input, in hours Energy input, physical units Year 1 150 1,080 180 Year 2 300 1,080 180 Year 3 350 1,080 180 Year 4 150 1,080 180 The risk-free nominal discount…Hydro Systems Engineering Associates, Inc. provides consulting services to city water authorities. The consulting firm’s contribution-margin ratio is 20 percent, and its annual fixed expenses are $120,000. The firm’s income-tax rate is 40 percent.Required:1. Calculate the firm’s break-even volume of service revenue.2. How much before-tax income must the firm earn to make an after-tax net income of $48,000?3. What level of revenue for consulting services must the firm generate to earn an after-tax net income of $48,000?4. Suppose the firm’s income-tax rate rises to 45 percent. Explain what will happen to the break-even level of consulting service revenue.
- An company uses a technology which it purchased for $15 million. Operating costs are $2 million per year, and revenues of $7.3 million. The service life of the technology is 5 years and salvage value is $2 million. The corporate tax rate is 25%. a) Calculate the after-tax IRR using the approximate approach. b) If the after-tax MARR is 15%, is this a good investment? c) Should you do a more precise IRR calculation before finalizing your decision? Briefly explain why or why not.The owner of a bicycle repair shop forecasts revenues of $176,000 a year. Variable costs will be $54,000, and rental costs for the shop are $34,000 a year. Depreciation on the repair tools will be $14,000. Prepare an income statement for the shop based on these estimates. The tax rate is 40%. NOTE: I know this is a simple one (Revenue - Expenses = Pretax profit - Taxes = Net Income). It’s just asking for income statement entries. However, for some reason I currently can’t figure out, a supposedly simple calculation is being marked as incorrect. I just need somebody else to take a look at this. Please help. Thanks!If the Resort Operating Center plans a targeted operating income of $210,000 and the tax rate is 30%, what is the organization's target net income?