The world’s Largest Sharp Brain Virtual Experts Marketplace Just a click Away
Levels Tought:
Elementary,Middle School,High School,College,University,PHD
| Teaching Since: | May 2017 |
| Last Sign in: | 407 Weeks Ago, 6 Days Ago |
| Questions Answered: | 66690 |
| Tutorials Posted: | 66688 |
MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Amsted, Inc. is considering a project that will increase revenues by $2.5 million, cash operating expenses by $700,000, and depreciation and amortization by $300,000 during 2011. For this project, the firm will purchase $800,000 of equipment during the year while decreasing its inventory by $200,000 (with no corresponding decrease in current liabilities). The marginal tax rate for Amsted is 35 percent. What is this project’s incremental after-tax free cash flow for 2011
| Statement showing computation of incremental Cash Flows | |
| Particulars | Amount |
| Increased Revenues | 2,500,000.00 |
| Increased Cash Operating Expenses | (700,000.00) |
| Increased Depreciation | (300,000.00) |
| Earnings before tax | 1,500,000.00 |
| Tax @35% | 525,000.00 |
| Earnings after tax | 975,000.00 |
| Increased Depreciation | 300,000.00 |
| Cash Flows after tax | 1,275,000.00 |
| Purchase of equipment | (800,000.00) |
| Sale of invcentory | 200,000.00 |
| Net Incremental cash flows | 675,000.00 |
Hel-----------lo -----------Sir-----------/Ma-----------dam-----------Tha-----------nk -----------You----------- fo-----------r u-----------sin-----------g o-----------ur -----------web-----------sit-----------e a-----------nd -----------acq-----------uis-----------iti-----------on -----------of -----------my -----------pos-----------ted----------- so-----------lut-----------ion-----------.Pl-----------eas-----------e p-----------ing----------- me----------- on-----------cha-----------t I----------- am----------- on-----------lin-----------e o-----------r i-----------nbo-----------x m-----------e a----------- me-----------ssa-----------ge -----------I w-----------ill----------- be-----------