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By how much did the firm’s net income exceed its free cash flow

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By how much did the firm’s net income exceed its free cash flow 1. Last year, Michelson Manufacturing reported $10,250 of sales, $3,500 of operating costs other than depreciation, and $1,250 of depreciation. The company had no amortization charges, it had $3,500 of bonds outstanding that carry a 6.5% interest rate, and its federal-plus-state income tax rate was 35%. This year’s data are expected to remain unchanged except for one item, depreciation, which is expected to increase by $725. By how much will the depreciation change cause the firm’s net after-tax income and its net cash flow to change? Note that the company uses the same depreciation calculations for tax and stockholder reporting purposes. a. $383.84; $206.68 b. $404.04; $217.56 c. $425.30; $229.01 d. $447.69; $241.06 e. $471.25; $253.75 2. Bartling Energy Systems recently reported $9,250 of sales, $5,750 of operating costs other than depreciation, and $700 of depreciation. The company had no amortization charges, it had $3,200 of outstanding bonds that carry a 5% interest rate, and its federal-plus-state income tax rate was 35%. In order to sustain its operations and thus generate sales and cash flows in the future, the firm was required to make $1,250 of capital expenditures on new fixed assets and to invest $300 in net operating working capital. By how much did the firm’s net income exceed its free cash flow? a. $673.27 b. $708.70 c. $746.00 d. $783.30 e. $822.47 Business Management Assignment Help, Business Management Homework help, Business Management Study Help, Business Management Course Help

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