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| Teaching Since: | May 2017 |
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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Problem 9-3 Calculating Projected Net Income [LO 2]
| A proposed new investment has projected sales of $830,000. Variable costs are 55 percent of sales, and fixed costs are $187,200; depreciation is $93,500. Assume a tax rate of 40 percent. |
| Required: |
| What is the projected net income? (Do not round intermediate calculations.) |
| Â Â Net income | $Â Â Â |
Problem 9-4 Calculating OCF [LO 2]
| Requirement 1: |
| Fill in the missing numbers in the following income statement: (Do not round intermediate calculations.) |
| Â | Â | Â |
| Â Â Sales | $ | 644,300 Â Â |
| Â Â Costs | Â | 345,800 Â Â |
| Â Â Depreciation | Â | 96,500 Â Â |
| Â | Â | |
| Â Â EBIT | $ | Â Â |
| Â Â Taxes (40%) | Â | Â Â |
| Â | Â | |
| Â Â Net income | $ | Â Â |
| Â | Â | |
| Â | ||
| Â |
| Requirement 2: |
| What is the OCF? |
| Â Â OCF | $Â Â Â |
| Requirement 3: |
| What is the depreciation tax shield? |
| Â Â Depreciation tax shield | $Â Â Â |
Â
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