Homework Answers
| Year | After Tax profit | Depreciation | Cash Flow | |||
| 0 | $ -5,000 | $ - | $ -5,000 | |||
| 1 | $ 750 | $ 400 | $ 1,150 | |||
| 2 | $ 500 | $ 400 | $ 900 | |||
| 3 | $ 300 | $ 400 | $ 700 | |||
| 4 | $ 200 | $ 400 | $ 600 | |||
| 5 | $ - | $ 400 | $ 400 | |||
| Average Annual Income = (750+500+300+200+0)/5 | ||||||
| =$875 | ||||||
| Return On Investment = Average Annual Income / Investement cost | ||||||
| =$875/5000 | ||||||
| ROI | 17.5% | |||||
| Note: Average Investment can be taken for ROI, which is as follows. | ||||||
| Average Investment = (beginning Investment + ending Investment)/2 | ||||||
| = ( $5000+0)/2 | ||||||
| = $ 2500 | ||||||
| ROI = $875/2500 | ||||||
| =35% | ||||||
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Complete the following questions: After Tax Profit, k$ Time, end Depreciation, K$ Cash Flow, K$ year...
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, has gathered the following data relative to the current
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$15,300
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Interest expense
15,200
Sales revenue
413,000
Inventory
69,600
Total costs before depreciation, interest and taxes
297,000
Tax rate on ordinary income
21%
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need help on this. Thank You. Homework: Chapter 7 - Depreciation & After-Tax Analysis Save Score:...
need help on this. Thank You.
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Hint: add the after-tax salvage value and the recovery of net
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please read questions because its third time no one can help
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Depreciation and accounting cash flow A firm in the third year
of depreciating its only asset, which originally cost $173,000 and
has a 5-year MACRS recovery period
, has gathered the following data relative to the current
year's operations:
Accruals
$15,300
Current assets
117,000
Interest expense
15,200
Sales revenue
413,000
Inventory
69,600
Total costs before depreciation, interest and taxes
297,000
Tax rate on ordinary income
21%
a. Use the relevant data to determine the operating cash flow
for the current...
The cash flow for two alternatives is shown in the table below. a) Determine which alternative should be selected based on present worth comparison (use i=10%). b) If your analysis period (study period) is just 3 years, what should be the salvage value of alternative A2 at the end of year 3 to make the two alternatives economically indifferent? A1 Year 0 -900 -400 A2 -1800 -300 -300 1 2 -400 3 -400+200 -300 4 5 6 -300 -300 -300...
need help on this. Thank You.
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Hint: add the after-tax salvage value and the recovery of net
working capital.
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