The law firm of Dewey, Cheatem, and Howe has monthly fixed costs of $100,000, EBIT of $250,000, and depreciation charges on its office furniture and computers of $5,000. Calculate the Cash Flow DOL for this firm.
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- The owner of a bicycle repair shop forecasts revenues of $172,000 a year. Variable costs will be $53,000, and rental costs for the shop are $33,000 a year. Depreciation on the repair tools will be $13,000. a. Prepare an income statement for the shop based on these estimates. The tax rate is 20%. b. Calculate the operating cash flow for the repair shop using the three methods given below: Now calculate the operating cash flow. Dollars in minus dollars out. Adjusted accounting profits. Add back depreciation tax shieldThe owner of a bicycle repair shop forecasts revenues of $200,000 a year. Variable costs will be $60,000, and rental costs for the shop are $40,000 a year. Depreciation on the repair tools will be $20,000. a. Prepare an income statement for the shop based on these estimates. The tax rate is 20%. b. Calculate the operating cash flow for the repair shop using the three methods given below: Now calculate the operating cash flow. Dollars in minus dollars out. Adjusted accounting profits. Add back depreciation tax shield.Please provide correct answer
- The owner of a bicycle repair shop forecasts revenues of $160,000 a year. Variable costs will be $50,000, and rental costs for the shop are $30,000 a year. Depreciation on the repair tools will be $10,000. a. Prepare an income statement for the shop based on these estimates. The tax rate is 20%. b. Calculate the operating cash flow for the repair shop using the three methods given below: Dollars in minus dollars out. Adjusted accounting profits. Add back depreciation tax shield.The owner of a bicycle repair shop forecasts revenues of $196,000 a year. Variable costs will be $59.000, and rental costs for the shop are $39.000 a year. Depreciation on the repair tools will be $19.000. a. Prepare an income statement for the shop based on these estimates. The tax rate is 20% Calculate the operating cash flow for the repair shop using the three methods given below Now calculate the operating cash flow 1. Dollars in minus dollars out 2. Adjusted accounting profits, in 3.Add back depreciation tax shieldThe owner of a bicycle repair shop forecasts revenues of $240,000 a year. Variable costs will be $70,000, and rental costs for the shop are $50,000 a year. Depreciation on the repair tools will be $30,000. Prepare an income statement for the shop based on these estimates. The tax rate is 20%. Calculate the operating cash flow for the repair shop using the three methods given below: Dollars in minus dollars out. Adjusted accounting profits. Add back depreciation tax shield.
- Finco Investment Corporation must determine an investment strategy for the firm during the next three years. Currently (time 0), $100,000 is available for investment. Investments A, B, C, D, and E are available. The cash flow associated with investing $1 in each investment is given in Table. For example, $1 invested in investment B requires a $1 cash outflow at time 1 and returns 50¢ at time 2 and $1 at time 3. To ensure that the company's portfolio is diversified, Finco requires that at most $75,000 be placed in any single investment. In addition to investments A-E, Finco can earn interest at 8% per year by keeping uninvested cash in money market funds. Returns from investments may be immediately reinvested. For example, the positive cash flow received from investment C at time 1 may immediately be reinvested in investment B. Finco cannot borrow funds, so the cash available for investment at any time is limited to cash on hand. Formulate an LP that will maximize cash on hand at time…For following problem, (a) draw the cash flow diagram; (b) present clean and clear manual solutions to the problem; (c) highlight the final answer (only the final answer as required by the problem) by enclosing it within a box. A new air conditioning system is to be installed in an office building. Purchasing and installing the system costs $100,000 and the company expects to save $50,000 every year on electricity bills. The company’s MARR is 10% per year, maintenance costs are worked out to be $10,000 per year and the system’s market value will be $20,000 at the end of 10 years. Use the FW method to determine whether the system should be installed.The owner of a bicycle repair shop forecasts revenues of $160,000 a year. Varlable costs will be $50,000, and rental costs for the shop are $30,000 a year. Depreciation on the repair tools will be $10,000. a. Prepare an income statement for the shop based on these estimates. The tax rate is 20%. INCOME STATEMENT Depreciation Pretax profit Rental costs Revenue Taxes b. Calculate the operating cash flow for the repair shop using the three methods given below: 1. Dollars in minus dollars out. II. Adjusted accounting profits. III. Add back depreciation tax shield. Methods of Calculation i. Dollars in minus dollars out ii. Adjusted Accounting profits iii. Add back depreciation tax shield Operating Cash flow