A company is considering the purchase of a universal grinding machine. The following table sets out...
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A company is considering the purchase of a universal grinding machine. The following table sets out a forecast of the annual accounting profit: Revenues Costs a Pretax profit $ 430,000 300,000 130,000 32,500 $ 97,500 Tax at 25% After-tax profit aNote: costs include depreciation of $90,000. Calculate the operating cash flow using the three methods set out in Equations (6.3A), (6.3B), and (6.3C). A company is considering the purchase of a universal grinding machine. The following table sets out a forecast of the annual accounting profit: Revenues Costs a Pretax profit $ 430,000 300,000 130,000 32,500 $ 97,500 Tax at 25% After-tax profit aNote: costs include depreciation of $90,000. Calculate the operating cash flow using the three methods set out in Equations (6.3A), (6.3B), and (6.3C).
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SOLUTION a Operating cash flow Revenues Expenses Taxes Given Revenues 430000 Costs 300000 Tax rate 25 Step 1 Calculate Taxes Tax Tax rate Pretax profi... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
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