Fill in the missing numbers for the following income statement. (Do not roundintermediate calculations.)SalesCostsDepreciationEBITTaxes (21%)Net income$657,800418,70098,300a. Calculate the OCF. (Do not round intermediate calculations.)b. What is the depreciation tax shield? (Do not round intermediate calculations.)a. OCFb. Depreciation tax shield

Step 1: To complete the missing amounts in the income statement, here is its detailed solution:…

Answered: Fill in the missing numbers for 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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In replacement analysis, an increase in depreciation expense due to purchase of a new asset will: 1) represent a cash inflow due to increased tax liability 2) represent a cash outflow due to increased tax liability 3) represent a cash inflow due to reduced tax liability 4) have no effect on cash, but increase taxes
K 1. Given the following information for Sookie’s Cookies Co., calculate the depreciation expense: sales = $86,616; costs = $55,374; addition to retained earnings = $791; dividends paid = $1,498; interest expense = $349; tax rate = 26 percent. (Hint: Build the Income Statement and fill in the missing pieces until you get to the depreciation expense. You may have to work from bottom up.)
Calculate the net profit from the following? Net sales OMR 100000, Cost of goods sold OMR 40000, Rent received OMR 20000, Salaries OMR 10000, Insurance OMR 6000 and Depreciation OMR 8000. a. OMR 16000 b. OMR 60000 c. OMR 56000 d. OMR 66000
One of the basic techniques used in evaluating after-tax operating cash flows is to Select one: a. add cash expenses to net income. b. subtract depreciation from net income. c. add noncash charges to net income. d. subtract retained earnings from net income.
A(n) ____ in the supply of peso for sale will cause the peso to ____. A. increase; appreciate B. increase; depreciate C. decrease; depreciate D. decrease; appreciate E. both the 2nd and 4th options are correct
Question 3. The following information is given in respect of Transport ple: a) Non-current assets consist entirely of plant and machinery. The net book value is £1,100,000 and the tax written down value after capital allowances (tax base) is £1,000,000. b) The provision for deferred taxes (all of which relates to fixed assets timing differences) on 30/06/2010 was £21,000. c) The company's capital expenditure forecasts indicate that capital allowances and depreciation in future years will be: Year ended 30th June (£) 2011 Depreciation charge for year (£) 12,000 14,000 20,000 40,000 44,000 46,000 Capital Allowances for year (£) 53,000 49,000 36,000 32,000 32,000 36,000 2012 2013 2014 2015 2016 For the following years, capital allowances are likely to continue to be in excess of depreciation for the foresecable future. d) Corporation tax is to be taken at 21%. Required: Calculate the deferred tax charges or credits for the next six years, commencing with year ended 30/06/2011, in…
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Question 6 So Long, Inc, has sales of $334,000, costs of $145,400, depreciation expense of $63,200 and interest expense of $22,300. If the tax rate is 35%, (a) What is the operating cash flow or OCF? (b) Explain why interest paid is not a component of operating cash flow.
Asset impairment charge is non-cash charge that is deductible for taxes. It is considered one-time in nature. · Income tax rate 25% (this is the same rate for income from all locations in this analysis). Create Income statement to determine if worthy of a purchase?
Just for clarification purposes, is the 50 000 a sunken cost and should it have been accounted for in the cash flow? The question states 800 000 after tax, but the adjustments were taken into account hence the after tax is 760 000. Please clarify.
Use the following information from separate companies a through d: Net Income (Loss) Interest Expense Income Taxes a. $ 111, 000 $ 59, 940 $ 27, 750 b. 105, 600 25, 344 38,016 c. 94, 350 25, 475 39, 627 d . 114, 100 4,564 54,768 Compute times interest earned. Which company indicates the strongest ability to pay interest expense as it comes due?
You are given the following information for Oceans of Fun.: sales = $74, 020; costs = $34, 980; addition to retained earnings 59,540; dividends paid $7,800; interest expense $2, 580; tax rate = 21 percent. Calculate the depreciation expense. (Do not round intermediate calculations.)

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