In 2018, the total costs of operations (excluding income tax) amounted to P1,680,000. Included in this amount is depreciation which is 20% of the total costs of operation. Income taxes are 50%. What must net sales be if the return on sales after tax is to be 8%?
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- Webster world has sales of $13,800, costs of $5800, depreciation expense of $1100, and interest expense of $700. What is the OCF if the tax rate is 23 percent?Gabbert’s Corporation expects to have sales of $15 million. Costs other than depreciations are expected to be 77% of sales, and depreciation is expected to be $1.8 million. All sales revenues will be collected in cash, and costs other than depreciation must be paid for during the year. The federal tax rate is 25%. Interest expense is $210,000. 1. Set up an income statement. What is Gabbert’s expcted net income? Its expected net cash flow? 2. Suppose Congress changed the tax laws so that Gabbert’s depreciation expenses went up by 60%. No changes in operations occurred. What would happen to the reported profit and to net cash flow? 3. Now suppose that Congress changed the tax laws such that, instead of increasing Gabbert’s depreciation, it was reduced by 60%. How would the profit and the net cash flow be affected? 4. If this were your company, would you prefer Congress to cause your depreciation expense to be increased or reduced? Why?Suppose a firm has the following information: Sales = $10million; costs of goods sold (excluding depreciation) = $5 million;depreciation = $1.4 million; other operating expenses = $2 million;interest expense = $1 million. If the tax rate is 25%, what is NOPAT,the net operating profit after taxes? ($1.2 million)
- The Berndt Corporation expects to have sales of $12 million. Costs other thandepreciation are expected to be 75% of sales, and depreciation is expected tobe $1.5 million. All sales revenues will be collected in cash, and costs otherthan depreciation must be paid for during the year. Berndt’s federal-plusstate tax rate is 40%. Berndt has no debt.a. Set up an income statement. What is Berndt’s expected net income? Itsexpected net cash flow?Suppose you sell a fixed asset for $126,000 when it's book value is $157,000. If your company's marginal tax rate is 35%, what will be the effect on cash flows of this sale (i.e., what will be the after-tax cash flow of this sale)?During 2020, Raines Umbrella Corp. had sales of $940, 000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $680,000, $85,000, and $165,000, respectively. In addition, the company had an interest expense of $53, 000 and a tax rate of 21 percent. (Assume that interest is fully deductible.) a. What was the company's net income or net loss for 2020? (Do not round intermediate calculations. Input your answer as a positive value.) b. What was its operating cash flow? (Do not round intermediate calculations.)
- The annual revenue, expenses, and depreciation for a company are $130,000; 32,000; and $11,000, respectively. What is the after-tax cashflow if the effective income tax rate is 23%? a.77990 b.66990 c. 75460 d. 64460 e. 20010Suppose you sell a fixed asset for $312,000 when its book value is $102,000. If your company’s marginal tax rate is 35 percent, what will be the effect on cash flows of this sale (i.e., what will be the after-tax cash flow of this sale)?Fragile Express Delivery Company’s earnings before interest and taxes (EBIT) was $725 million. Assuming Fragile Express Delivery’s tax rate is 37%, what is their net operating profit after taxes (NOPAT) for 2019 expressed in millions of dollars
- Menendez Corporation expects to sell $ 12 million. Costs, excluding depreciationtion, will represent 75% of sales and a depreciation of $ 1.5 million is expected.Sales will be collected in cash and all costs less depreciation will bebe settled during the year. The federal and state tax rate is 40%.to. Prepare an income statement. What will the company's expected net cash flow be?b. Suppose that Congress modified the tax laws and that doubled thecompany pricing. There were no changes in operations. How would it affectThat in recorded earnings and net cash flow?c. Now suppose that Congress did not double depreciation but reduced it byfifty%. How will that affect net cash flow?d. If it were your company, would you prefer Congress to double depreciation spendingtion or cut it in half? Explain your answer.High Towers, Inc., has sales of $586,000, costs of $363,000, depreciation expense of $32,000, and interest expense of $14,000. If the tax rate is 33 percent, the operating cash flow, or OCF, is $ ______ . (Round your answer to the nearest whole dollar amount. Do not include the dollar sign ($).).Suppose you sell a fixed asset for $109,000 when its book value is $129,000. If your company’s marginal tax rate is 39 percent, what will be the effect on cash flows of this sale (i.e., what will be the after-tax cash flow of this sale)? (Enter your answer as a whole number.)
