Assume a firm has earnings before depreciation and taxes of $200,000 and no depreciation. It is in a 25 percent tax bracket. a. Compute its cash flow. b. Assume it has $200,000 in depreciation. Recompute its cash flow. c. How large a cash flow benefit did the depreciation provide

Answers

Answer 1

If  the firm has earnings before depreciation and taxes of $200,000. The cash flow is: $150,000; $200,000 and cash flow benefit is $50,000.

Cash flow

a. Cash flow

Cash Flow= Earnings before depreciation and taxes×(1-Tax rate)

Cash Flow = $200,000×(1-0.25)

Cash Flow = $200,000×0.75

Cash Flow = $150,000

b. Cash flow

Earnings before taxes = EBIT - Depreciation

Earnings before taxes= $200,000 - $200,000

Earnings before taxes= $0

Cash flow = Earning after tax + Depreciation

Cash flow = $0 +$200,000

Cash flow= $200,000

c. Cash flow benefit

 Cash flow benefit= Depreciation expenses x tax rate

Cash flow benefit=$200,000 x 25%

Cash flow benefit =$50,000

Therefore the cash flow is: $150,000; $200,000 and cash flow benefit is $50,000.

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Related Questions

please give me ten pros and ten cons for online banking.

Answers

Answer:

ADVANTAGES OF ONLINE BANKING

•Pay bills online

This might be one of the top advantages of online banking because you don’t have to take time out of your day to go to the bank.

•Transfer money

You may need to do a rapid money transfer to a client or vendor, or you may need to transfer money from one account to another.

•Deposit cheques online

Rather than driving to a bank branch and waiting in line, you may be able to deposit cheques online in minutes.

•Lower your overhead fees

If your business banks online, your banking fees may be lower, as online banks may not have to pay for the cost and upkeep of branches, and those savings may be transferred to you.

•24/7 account access.

Whether you’re on vacation or it’s the middle of the night, you can manage your banking.

•Simpler fund transfers.

It’s easy to move funds between your accounts, such as from checking to savings, using online banking.

•Better access to bank records.

Whether you need banking records for tax purposes or personal records, you can download statements and transaction records to print them at home.

•Improved visibility of account balances and transactions.

Knowing your account balances is always a few clicks away. You can also check to make sure a transaction has cleared and keep an eye out for unauthorized transactions so you can dispute them immediately.

•Ability to sync your accounts with your apps.

Online banking allows you to transfer information from your accounts to Quicken, Microsoft Money, Microsoft Excel, and other applications.

•Use of mobile apps.

Many banks allow you to use your mobile devices for online personal banking.

DISADVANTAGES OF ONLINE BANKING

•Technology disruptions

Online banking relies on a strong internet connection.

•Lack of a personal relationship

A personal relationship with your bank may be able to offer an advantage over online banking.

•Privacy and security concerns

Financial institutions have very good security, but no system is foolproof.


•Limited services

Online banking features a lot of services, but some of them still require business owners to go into banks to “wet sign” documents. This includes loan and credit applications, a large cash withdrawal or large deposits.

•Security and Identity Theft Concerns

In general, online banking sites and mobile apps are designed to be secure and banks are continually putting updated security protocols in place.

•Convenient but Not Always Faster

While it may take very little time to deposit a check via a bank's mobile app, you still need to wait for access to your money.

•A Limited Scope of Services

Although you can do quite a bit with an online bank account, such as make deposits, check balances and pay bills, there are limitations to the kinds of services you can access.

•Potential to Overspend

The ability to check account balances in the spur of the moment could potentially cause some people to overspend the limits of their checking accounts.

•Limitations on Deposits

Daily or monthly mobile deposit limitations may make it difficult for individuals, but especially businesses to make large deposits online.

•Low stimulus to savings

Due to the low interest rate that traditional banks usually pay to their savings clients, there is a low saving stimulus.

Which factors did you include in your response? Check all that apply.


Option A is not possible, because I do not have enough money saved.

Option B is not a good choice, because it is over my budget.

Option C is the best choice for my budget.




You can choose anything it wont matter

Answers

Option C is the best choice for my budget.

Answer:

All of the above

Explanation:

During the ________ stage, various elements of the marketing mix must be developed for testing such as copyrights, tentative advertising copy, packaging, labeling, and descriptions of a target market.

Answers

During the Goals and Objectives stage, various elements of the marketing mix must be developed for testing the copyrights and tentative advertising copy.

What is marketing mix?

marketing mix serves as the term that describes anyone that is directly or indirectly involved in the business side of the enterprise.

Conclusively, at the Goals and Objectives stage, testing the copyrights and tentative advertising copy is important for the future of the business.

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All of the following are forms of nonstore retailing EXCEPT: Group of answer choices telemarketing. factory outlets. direct selling. television home shopping.

Answers

Factor Outlets and Direct selling are not the forms of Nonstore retailing as they form part of direct selling.

What is Nonstore Retailing?

Nonstore retailing is the sale of goods and services outside the boundaries of the retail space. A common term that describes sales that take place outside stores and shops.

Institutions in this subdivision include mail ordering houses, vending equipment operators, real estate sales, door-to-door sales, party systems sales, e-commerce, and portable real estate sales.

Thus, Factor Outlets and Direct selling are not the forms of Nonstore retailing as they form part of face-to-face selling.

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A trademark is an exclusive right granted to its owner to publish and sell a musical, literary, or artistic work during the life of the creator plus 70 years. Group of answer choices true false

Answers

It is "False" that a trademark is an exclusive right granted to its owner to publish and sell a musical, literary, or artistic work during the life of the creator plus 70 years.

What do you mean by Trademark?

A trademark is a type of intellectual property consisting of a recognizable sign, design, or expression which identifies products or services of a particular source from those of others,

Copyright to create works such as literary books, music albums, films, animated media, and so on.

Copyrights protect creative or intellectual works, and trademarks apply to commercial names, phrases, and logos.

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Why do corporations pay attention to what is happening to their stock in the secondary market

Answers

Answer:

The existence of the secondary market makes their stock more liquid and the price in the secondary market sets the price that the corporation would receive if they choose to sell more stock in the primary market.

Explanation:

For a general sense of how one organization's monetary incentives relate to other organizations in the same industry, managers can compare
A) pay levels.
B) pay structures.
C) performance appraisals.
D) benefit plans.
E) employee perks.

Answers

For a general sense of how an organization's monetary incentives relate to other organizations in the same industry, managers can compare: B. pay structures.

What is a pay structure?

A pay structure can be defined as a financial system or payment plan that defines the amount of money that is being paid to the employees working in a business organization with respect to their job roles (positions) and the value they add to the organization.

This ultimately implies that, managers can compare pay structures so as to enable them have a general sense of how their organization's monetary incentives relate to other organizations within the same industry.

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Which skills are most likely to start at birth and develop as a person matures?Planning aides work with _____.


school planners


city planners


federal planners


business planners

Answers

Answer:

im thinking C. or D.

Explanation:

Gina wanted to tell her employees about an upcoming seminar, but she put the flyer in a stack of papers and forgot about it until after the deadline, so none of her employees were able to sign up for the seminar. What type of barrier has occurred in this situation

Answers

Gina wanted to tell her employees about an upcoming seminar, but she put the flyer in a stack of papers and forgot about it until after the deadline. The event paints a picture of a sender barrier.

What is the sender barrier?

Generally, the Sender barrier can be defined by the following; The are the sender barriers Inadequate knowledge or thoughts about the receiver.

In conclusion, the type of barrier that has occurred in this situation is the sender barrier.

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Which of the following is an example of nonverbal communication? shaking hands to greet a supervisor writing an email to a coworker talking on the telephone to a customer listening to a presentation at a meeting

Answers

Answer: shaking hands to greet a supervisor.

Explanation:

nonverbal communication is communication through a nonverbal platform. I.e eye contact, facial expressions, gestures, etc.

Increases in the Gross National Product best indicate increasing economic ..... (1 point)

growth

security

freedom

efficiency

Answers

Answer:

growth

Explanation:

look at the lesson again and take more note because it  tells you in the lesson.

If $200 is deposited in a savings account at the beginning of each of 15 years and the account draws interest at 8% per compounded annually, the value of the account at the end of 15 years will be nearly:

Answers

2,760
Explanation: 200 X .08 = 16 200-16= 184 184 X 15 = 2,760

The value of the account at the end of 15 years will be nearly is $2,760.

What is a savings account?

A savings account is an interest-bearing deposit account held at a bank or other financial institution. These accounts offer relatively low interest rates, but their dependability and security make them a great option for keeping money on hand for emergency needs.

This is one of the best kinds of savings accounts for maximizing the growth of your money. Online banks commonly provide several sorts of high yield savings accounts to tempt depositors who want to earn a greater interest rate than what is provided at brick-and-mortar banks and credit unions.

The three most common types of savings accounts are regular deposit, money market, and certificates of deposit.

Thus, it is $2,760.

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Gretchen works for Securitas Financial Group, but she seldom sees the inside of the offices. Instead, she does most of her work in a home office she put together in a spare bedroom. Her computer is linked to Securitas's office, so her work is distributed as quickly and efficiently as if she were at the office. Gretchen is one of the increasing number of workers who

Answers

Since Gretchen does most of her work at home and seldom go to office, Gretchen have become independent contractors.

Who is an independent contractor?

An independent contractor serves as a self-employed person, who is a consultant that provides services to other organization.

Therefore, under Common law principles, independent contractor can be regarded as a status involving method of payment.

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One of the disadvantages of using customer value propositions is that they are complex and difficult to understand. True False

Answers

It is false that using customer value propositions is that they are complex and difficult to understand.

What is customer value proposition?

Customer value proposition is a type of business statement that entails detailed information why a customer need to buy a product or use a service. The main target of customer value proposition is their potential customers rather than other groups like employees, partners or suppliers.

Therefore, It is false that using customer value propositions is that they are complex and difficult to understand.

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(17) What are the 3 predominant areas of a market opportunity analysis that we must take into consideration as Marketing Managers?

Answers

Understanding the strength weaknesses, opportunities and threat that a business is prone to are crucial during the market opportunity analysis

Predominant areas of a market opportunity

Marketing opportunity analysis is crucial for marketing managers to analyze in order to move past their competitors

Some of the things that we must take into consideration as Marketing Managers include

Defining the market  intend to breakthroughUnderstanding the need of the customers prior to productionCarrying out the SWOT analysis.

Knowing the strength weaknesses, opportunities and threat that a business is prone to are crucial during the market opportunity analysis.

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Which of the following is not a characteristic of a Successful Resume?

Select 1 correct answer(s)
Question 15 options:

Focuses on skills. Uses action words to define the responsibilities of your job-related experience.


Easy to read and understand


Visually powerful and free of gimmicks


One page, or at most 2 pages long


Spelling & grammar has been checked


Must always be 100% true


It must be handwritten

Answers

The option that is not a characteristic of a successful resume is that It must be handwritten.

What are characteristics of successful resumes?

They are written in such a way that they are easy to read and have correct and checked spelling and grammer. The details within should be completely true and it should be free of gimmicks.

It is not important that the resume is handwritten, in fact, it shouldn't be handwritten at all but rather typed.

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Journal entry for purchased goods from ABC Co. for Rs. 11,000.​

Answers

Answer:

purchase A/c. Dr. Rs.11,000

To ABC CO.A/c. Rs.11,000

(being goods purchased in cash)

Peng Company is considering buying a machine that will yield income of $2,100 and net cash flow of $19,500 per year for three years. The machine costs $59,700 and has an estimated $7,500 salvage value. Compute the accounting rate of return for this investment.

Answers

The accounting rate of return for this investment given its income, cost of the machine and the salvage value is 8.05%.

What is the accounting rate of return?

The accounting rate of return is a capital budgeting method used to determine the level of profitabiliy of an investement.

Accounting rate of return = Average net income / Average book value

Average book value = (cost of equipment - salvage value) / 2

Average book value = (59700 - 7500) / 2 = $21,600

Accounting rate of return = $2100 / 21600 = 8.05%

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Contracted parties discharge their obligations by doing what they respectively agreed to do under the terms of an agreement; this is called discharge by ______.

Answers

If Contracted parties discharge their obligations by doing what they respectively agreed to do: this is called discharge by performance

What is Discharge by performance?

Discharge by perfomance can be defined as the process in which a parties in a contract agreed to carryout or agreed to perform their duties based on the terms of their agreement.

By doing so the parties has fulfil their obligation based on their contract agreement which is know as discharge of performance.

Therefore this is called discharge by performance

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Suppose that the central bank increases interest rates in an economy. How would this affect aggregate demand and inflation

Answers

Answer:

aggregate demand would fall and inflation would fall

Explanation:

The reserve ratio equals 2 percent. The Fed buys $1 million in U.S. government securities. The most the money supply can increase is a. $10 million. b. $40 million. c. $50 million. d. $100 million.

Answers

If the Fed buys $1 million in U.S. government securities. The most the money supply can increase is: c. $50 million.

Money supply

Using this formula

Mioney supply=Government securities/Reserve ratio

Where:

Government securities=$1 million

Reserve ratio=2% or 0.02

Let plug in the formula

Money supply=$1 million/0.02

Money supply=$50 million (Increase)

Therefore the most the money supply can increase is: c. $50 million.

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Some business insurance policies cover "business interruption." If your business makes $300,000 per year and a flood prevents operation for 3 weeks, about how much money would you lose without business interruption insurance? a) $13,087 b) $15,566 c) $16,200 d) $17,308

Answers

Answer:

D): $17,308

Explanation: 300,000/365 = 822. 822 * 21 = 17300

While the straight-line method of amortizing bond premium or discounts keeps the amortization equal over the life of the bond, the effective interest method keeps the __________ equal over the life of the bond.

Answers

The answer will be interest rate

What is the term for assets that can be quickly and easily converted to cash? A. non-liquid assets B. liquid assets C. liabilities D. deficits

Answers

1. D

Explanation:

Hope it helps you

Thx

Answer: Liquid Assets

Explanation: Just took the final

A media company acquires a film production company, a film editing firm, and a film distribution firm. By owning different stages of movie making, the company is ________ integrated.

Answers

By owning different stages of movie making, the company is vertically integrated.

What is vertical integration?

Vertical integration can be regarded as process that involves acquiring business operations towards identical production.

It is also the merger of companies that are operating in same business even though they have different stages of production or distribution

Hence, by owning different stages of movie making, the company is vertically integrated.

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Which two main categories can an organization fall into that would require them to comply with hipaa rules?.

Answers

The main categories that an organization can fall into that would require them to comply with hipaa rules are covered entities and business associates.

What is HIPAA rule?

HIPAA rule simply means national standards to protect individuals medical records and other health information.

In this case, the main categories that an organization can fall into that would require them to comply with hipaa rules are covered entities and business associates.

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Major investments in either tangible long-term assets such as land, or intangible assets such as patents are considered to be ______ expenditures.

Answers

Answer: Capital Expenditure

Explanation:

What characteristics of an organizational structure and culture are best suited to achieving a cost-leadership strategy

Answers

An informal type of organizational structure is one best suited for achieving a cost-leadership strategy especially when the managers is promoting innovation.

What is a cost leadership strategy?

This is a cost strategy that relies on a firm's ability in using a lower costs of production to offer quality products at low prices.

These type of strategy is best achieved with an informal type of organizational structure & culture.

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Just as banks and thrifts accept the deposits of and make loans to the public, the ______ accepts the deposits of and makes loans to banks and thrifts.

Answers

If banks and thrifts accept the deposits of and make loans to the public, the central bank accepts the deposits of and makes loans to banks and thrifts.

What is central bank?

Central bank is a financial institution that have control over other banks and they help to regulate the flow of money or money in circulation,

Cental bank oversees the financial activities of other financial institution and they as well accept deposit and grant loans to banks.

Therefore  central bank accepts the deposits of and makes loans to banks and thrifts.

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A presentation in the sales process is designed to match the benefits of a product to the client's ______.

Answers

Answer:

needs

Explanation:

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