Question

A proposed new project has projected sales of $222,000, costs of $96,500, and depreciation of $26,100....

A proposed new project has projected sales of $222,000, costs of $96,500, and depreciation of $26,100. The tax rate is 24 percent. Calculate operating cash flow using the four different approaches. (Do not round intermediate calculations.)

A. EBIT+Depreciation-Taxes

B. Top-Down

C. Tax-Shield

D.Bottom-Up

0 0
Add a comment Improve this question Transcribed image text
Answer #1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

Home nert Page Layout Formulas Data Review View dd-Ins s Cut aCopy E AutoSum ー E ゴWrap Text в 1 프· ー· 鱼, Δ. :r-ㄧ 逻锂函Merge & Center. $, % , 弼,8 C Paste Conditional Format CeInsert Delete Format Formatting as Table Styles2 Clear Sort &Find & Format Painter Clipboard Alignment Number Cells Edting F153 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 4 SALES COSTS DEPRECIATION EBIT TAX NET INCOME 222000 96500 26100 99400 23856 24%*99400 75544 APPROACH 1 FREE CASH FLOW APPROACH EBIT DEPRECIATION TAXES 99400 26100 23856 101644 ADD LESS APPROACH 2 TOP -DOWN APPROACH EBIT(1-t) DEPRECIATION 99400(1-0.24) 26100 101644 OCF CASH FLOW STATW ARM, MSI.confidenceINDEX / CURRENCY , LOAN (/CROSS OVER . HEDGING MONEY MARKET / GM HPR AM . TAX GROWTH SUST PREF AND DIV POLICY , 「 .. 05:36 22-01-2019Home nert Page Layout Formulas Data Review View dd-Ins s Cut ta copy ▼ Σ AutoSum ー E ゴWrap Text в 1 프· ー· 鱼, Δ. :r-ㄧ 逻锂函Merge & Center. $, % , 弼,8 C Paste Conditional Format CeInsert Delete Format Formatting as Table Styles2 Clear Sort &Find & Format Painter Clipboard Alignment Number Cells Edting F162 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 1 PPROACH 1 FREE CASH FLOW APPROACH EBIT DEPRECIATION TAXES 99400 26100 23856 101644 ADD LESS PPROACH 2 TOP -DOWN APPROACH EBIT(1-t) DEPRECIATION 99400 (1-0.24) 26100 101644 APPROACH 3 TAX SHIELD APPROACH (SALES-EXPENSES) (1-t)DEPRECIATION (t) (222000-96500)*(1-0.24) 26100 (0.24)101644 PPROACH 4 BOTTOM-UP APPROACH NET INCOME DEPRECIATION 75544 26100 101644 | | OCF CASH FLOW STATW ARM, MSI.confidenceINDEX / CURRENCY , LOAN (/CROSS OVER . HEDGING MONEY MARKET / GM HPR AM . TAX GROWTH SUST PREF AND DIV POLICY , 「 .. 05:36 22-01-2019

Add a comment
Know the answer?
Add Answer to:
A proposed new project has projected sales of $222,000, costs of $96,500, and depreciation of $26,100....
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT