The MacCauley Company has sales of $150 million and total expenses (excluding depreciation) of $90 million. Straight-line depreciation on the company’s assets is $15 million, and the maximum accelerated depreciation allowed by law is $25 million. Assume that all taxable income is taxed at 40 percent. Assume also that net working capital remains constant. Enter your answers in millions. Calculate the MacCauley Company’s after-tax operating cash flow using both straight-line and accelerated depreciation. After-tax operating cash flow (straight-line depreciation): $ million After-tax operating cash flow (accelerated depreciation): $ million Assuming that the company uses straight-line depreciation for book purposes and accelerated depreciation for tax purposes, show the income statement reported to the stockholders. Revenues $ million Total operating expenses $ million Depreciation $ million Operating earnings before tax $ million Tax @ 40% $ million Operating earnings after tax $ million What is the after-tax operating cash flow under these circumstances? $ million
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The MacCauley Company has sales of $150 million and total expenses (excluding
After-tax operating cash flow (straight-line depreciation): $ million After-tax operating cash flow (accelerated depreciation): $ million
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