Suppose a corporation has earnings before depreciation and taxes of $103,000, depreciation of $41,000, and has a
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Question:
Suppose a corporation has earnings before depreciation and taxes of $103,000, depreciation of $41,000, and has a tax bracket of 40 percent. |
a. | Calculate your cash flow using the following format. (Enter all responses as positive values.) |
Earnings before depreciation and taxes | ps |
Depreciation | |
earnings before taxes | ps |
Taxes | |
profit after tax | ps |
Depreciation | |
Cash flow | ps |
b. | How much would the cash flow be if there were only $15,000 in depreciation? All other factors are the same. |
Cash flow | ps |
C. | How much cash flow is lost due to the reduction in depreciation from $41,000 to $15,000? |
loss of cash flow | ps |
Related Book For
Foundations of Financial Management
ISBN: 978-1259194078
15th edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen
Posted Date: