The Moore Enterprise has gross profit of $1,180,000 with amortization expense of $510,000. The Kipling Corporation has $1,180,000 in gross profits but only $75,000 in amortization expense. The selling and administration expenses are $135,000; the same for each company. If the tax rate is 20 percent, calculate the cash flow for each company. Kipling Cash flow Moore Difference in cash flow $ Calculate the difference in cash flow between the two firms?

The Moore Enterprise has gross profit of $1,180,000 with amortization expense of $510,000. The Kipling Corporation has $1,180,000 in gross profits but only $75,000 in amortization expense. The selling and administration expenses are $135,000; the same for each company. If the tax rate is 20 percent, calculate the cash flow for each company. Kipling Cash flow Moore Difference in cash flow $ Calculate the difference in cash flow between the two firms?

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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Ramsay & Bell, Inc. had sales for 2019 of $180,000, and EBITDA was 36% of sales. Furthermore, depreciation was $8,400, interest was $5,760, the corporate tax rate was 21%, and the company pays 10% of its net income as dividends. Given this information and the balance sheets below, calculate the free cash flow for 2019. $24,556 $27,056 $28,556 $30,056 None of the above is within $100 of the correct answer.
Calculate the operating cash flow for Initech. (Assume that depreciation is tax deductible.) Initech Corp. Income Statement ($000's) Revenue Cost of Goods Sold SG&A Depreciation Expense. EBIT Interest Expense Income Before Taxes Taxes Net Income: $100,000 64,798 16,202 4,739 14,260 7,230 7,030 2,108 $4,922
Graff, Incorporated, has sales of $41,680, costs of $13,560, depreciation expense of $2,910, and interest expense of $2,120. The tax rate is 24 percent. What is the operating cash flow, or OCF? Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32. Operating cash flow $ 17,548
You are considering an investment in Fields and Struthers, Incorporated, and want to evaluate the firm's free cash flow. From the income statement, you see that Fields and Struthers earned an EBIT of $62 million, had a tax rate of 21 percent, and its depreciation expense was $6 million. Fields and Struthers's gross fixed assets increased by $32 million from last year to this year. The firm's current assets increased by $24 million and spontaneous current liabilities increased by $14 million. Calculate Fields and Struthers's NOPAT. Note: Enter your answer in millions of dollars rounded to
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Black River Adventures has net income of $3,518, interest expense of $1,715, sales of $24, 450, and costs of $10, 180. What is the amount of the depreciation expense if the firm's tax rate is 35 percent? Multiple Choice $7, 142.69 $2,503.57 $9, 037.00 $8,857.69
Kela Corporation reports net income of $570,000 that includes depreciation expense of $78,000. Also, cash of $59,000 was borrowed on a 4-year note payable. Based on this data, total cash inflows from operating activities are: Multiple Choice $629,000. $648,000. $492,000. $707,000.
Griffin's Goat Farm, Inc., has sales of $675,000, costs of $337,000, depreciation expense of $81,000, interest expense of $50,500, a tax rate of 23 percent, and paid out $42,500 in cash dividends. What is the addition to retained earnings? (Do not round intermediate calculations.)
Foraker Inc. has sales of $52,900, costs of $35,443, depreciation expense of $3,480, and interest expense of $2,105. If the tax rate is 21%, the operating cash flow (OCF) is:
This year, FCF Inc. has earnings before interest and taxes of $9,630,000, depreciation expenses of $1,200,000, capital expenditures of $1,700,000, and has increased its net working capital by $600,000. If its tax rate is 35%, what is its free cash flow?
Everybody’s Fitness's 2021 income statement is reported below (in millions of dollars) (Use corporate tax rate of 21 percent for your calculations.) Everybody’s Fitness Income Statement for 2021(in millions of dollars) Net sales (all credit) $ 1,385 Less: Cost of goods sold 540 Gross profits $ 845 Less: Other operating expenses 315 EBITDA $ 530 Less: Depreciation and amortization 152 EBIT $ 378 Less: Interest 175 EBT $ 203 Less: Taxes Net income $ Determine the firm’s 2021 tax liability. Tax Liability = ________ Determine the firm’s 2021 net income. Net Income = ________ Determine the firm’s 2021 average tax rate. (Round your answer to 2 decimal places.) Average Tax Rate = __________% Determine the firm’s 2021 marginal tax rate. Marginal Tax Rate = __________%

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