Question

PLease i need help with this question

Fill in the missing numbers for the following income statement. (Do not round intermediate calculations.) Sales $ Costs 669,200 432,100 105,000 points Depreciation EBIT Taxes (25%) Net income Print References b. Calculate the OCF. (Do not round intermediate calculations.) c. What is the depreciation tax shield? (Do not round intermediate calculations.) b. OCF c. Depreciation tax shield

Answer 1

a.

Sales	$669,200
Costs	$432,100
Depreciation	$105,000
EBIT	$132,100
Taxes (25%)	$33,025
Net income	$99,075

b. OCF = EBIT + Depreciation −Taxes

OCF = $132,100 + $105,000 − $33,025

OCF = $204,075

c. Depreciation tax shield = T(Depreciation)

Depreciation tax shield = 0.25($105,000)

Depreciation tax shield = $26,250