The manager of a company is considering a special project that will increase sales revenue by $27,500 without affecting costs. If the company has a tax rate of 40%, what will be the after-tax income?
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- Changes Analyze Operational Richmond's is a retail store with eight departments, including a garden department that has been operating at a loss. The following condensed income statement gives the latest year's operating results: Sales Cost of sales Gross profit Direct expenses Common expenses Total expenses Net income (Loss) Garden Department $336,000 201,600 134,400 108,000 48,000 156,000 $(21,600) % All other departments 0 All Other Departments $2,400,000 1,560,000 840,000 273,000 312,000 585,000 $255,000 a. Calculate the gross profit percentage for the garden department and for the other departments as a group. Garden department 0 % b. Suppose that if the garden department were discontinued, the space occupied could be rented to an. A manager is trying to decide whether to build a small, medium, or large facility. Demand can be low, average, or high, with the estimated probabilities being 0.25, 0.40, and 0.35, respectively. A small facility is expected to earn an after-tax net present value of just $18,000 if demand is low. If demand is average, the small facility is expected to earn $75,000; it can be increased to medium size to earn a net present value of $60,000. If demand is high, the small facility is expected to earn $75,000 and can be expanded to medium size to earn $60,000 or to large size to earn $125,000. A medium-sized facility is expected to lose an estimated $25,000 if demand is low and earn $140,000 if demand is average. If demand is high, the medium-sized facility is expected to earn a net present value of $150,000; it can be expanded to a large size for a net payoff of $145,000. If a large facility is built and demand is high, earnings are expected to be $220,000. If demand is average for the…When calculating Return on Investment (ROI) we take the benefit/cost x 100. Or as we reviewed in class: ROI= (average annual profit/total investment) x 100. So, if I invest in Fall protection for my company at a cost of $10,000, and for the purposes of calculation, you determine if it saves that company 10% of it's fall- related WC claims annually, the annual benefit would be around $3,000 annually, what would you project your ROI to be? (one best answer) 30% 10% $3,000 I don't need to calculate the ROI, because it is required by law.
- Sedgwick Inc. is considering Plan 1 which is estimated to have sales of $40,000 and costs of $15,500. The company currently has sales of $37,000 and costs of $14,000.Compare plans using incremental analysis. If Plan 1 is selected, there would be incremental decreaseincrease in profit by $ .You are considering adding a microbrewery onto one of your firm's existing restaurants. This will entail an investment of $40,000 in new equipment. The new equipment falls under asset class 43 and has a capital cost allowance (CCA) rate of 30%. If your firm's marginal corporate tax rate is 35%, then what is the value of the microbrewery's CCA tax savings in the first year of operation? a) $2,100 b) $14,000 c) $4,200 d) $12,000assuming cost of capital of 10% and then answer the following questions: 1. if the company decides to give a bonus to managers based on Residual Income, Which segment’s manager will get the bonus? a) Segment D b) Segment B c) Segment C d) Segment A 2. If the company decides to give a bonus to managers based on ROA, which segment's manager will get the bonus? a) Segment B b) Segment A c) Segment C d) Segment D
- Need help with this questionb-t. Assume the firm hires Ms. Carr, an efficiency expert, as a consultant. She suggests that by increasing selling and administrative expenses to 15 percent of sales, sales can be increased to $1,450,600. The extra sales effort will also reduce cost of goods sold to 73 percent of sales. (There will be a larger markup in prices as a result of more aggressive selling.) Depreciation expense will remain at $10,000. However, more automobiles will have to be carried in Inventory to satisfy customers, and interest expense will go up to $16,800. The firm's tax rate will remain at 30 percent. Compute revised earnings after taxes based on Ms. Carr's suggestions for Lemon Auto Wholesalers. (Round taxes and earnings after taxes to 1 decimal place.) Lemon Auto Wholesalers Income Statement $ $ LA $ $ 100 0 0 0 0.0 TENSONPARAFinally, assume that the new product line isexpected to decrease sales of the firm’s otherlines by $50,000 per year. Should this be considered in the analysis? If so, how?
- Give typing answer with explanation and conclusion What is the change in the NPV of a one-year project if fixed costs are increased from $400 to $600, assuming the firm is profitable, has a 21% tax rate, and a 12% cost of capital.Your business plan for your proposed start-up firm envisions first-year revenues of $120,000, fixed costs of $30,000, and variable costs equal to one-third of revenue.a. What are expected profits based on these expectations?b. What is the degree of operating leverage based on the estimate of fixed costs and expected profits?c. If sales are 10% below expectation, what will be the decrease in profits?d. Show that the percentage decrease in profits equals DOL times the 10% drop in sales.e. Based on the DOL, what is the largest percentage shortfall in sales relative to original expectations that the firm can sustain before profits turn negative?f. What are break-even sales at this point?g. Confirm that your answer to (f) is correct by calculating profits at the break-even level of sales.Lou Lewis, the president of Lewisville Company has asked you to give him an analysis of the best use of a warehouse the company owns. The company has a 40% effective tax rate. a. Lewisville Company is currently leasing the warehouse to another company for $5,000 per month on a year-to-year basis. b. The warehouse's estimated sales value is $200,000. A commercial realtor believes that the price is likely to remain unchanged in the near future. The building originally cost $60,000 and is being depreciated at $1,500 annually. Its current net book value (NBV) is $7,500. 1. Show how you would handle the individual items in determining whether the company should continue to lease the space or convert it to a factory outlet. Use PV function in Excel, VDB function in Excel to calculate annual depreciation charges. Use NPV function to calculate depreciation tax savings. (complete questions is attached.) Thank you!!!
