Due to depreciation earnings will be reduced.
It will be subtracted from total profit before calculating tax
Now depreciation is 9.5 million dollar per year and tax Is 40 percent
So tax saved from depretiation = 9.5*0.4 = 3.8 million dollar
So earning will reduce by 9.5-3.8 = 5.7 million dollars
Answer: decrease, $5.7 million per year
Nokela Industries purchases a $38.0 million cyclo-converter. The cyclo-converter will be depreciated by $9.5 million per...
Nokela Industries purchases a $40.4 million cyclo-converter. The cyclo-converter will be depreciated by $10.1 million per year over four years, starting this year. Suppose Nokela's tax rate is 25% a. What impact will the cost of the purchase have on earnings for each of the next four years? b. What impact will the cost of the purchase have on the firm's cash flow for the next four years? a. What impact will the cost of the purchase have on earnings...
with financal cal
Nokela Industries purchases a $43.2 million cyclo-converter. The cyclo-converter will be depreciated by $10.8 million per year over four years, starting this year. Suppose Nokela's tax rate is 25% a. What impact will the cost of the purchase have on earnings for each of the next four years? b. What impact will the cost of the purchase have on the firm's cash flow for the next four years? a. What impact will the cost of the purchase...
dont know why question b is wrong
Score: 0 of 1 pt 4 of 13 0 complete) HW Score: 23.08%, 3 of 13 pts P 2-18 (similar to) EQuestion Help Nokela Industries purchases a $40.8 million cyclo-comverter. The cyclo-converter will be depreciated by $10.2 million per vear over four years, starting this year. Suppose Nokela's tax rate is 40% a What impact will the cost of the purchase have on eamings for each of the next four years? b. What...
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JPJ Corp has sales of $1.03 million, accounts receivable of $54,000, total assets of $5.13 million (of which $2.92 million are fixed assets). inventory of $151.000, and cost of goods sold of $590,000. What is JPJ's accounts receivable days? Fixed asset turnover? Total asset turnover? Inventory turnover? What is JPJ's accounts receivable days? JPJ's accounts receivable days are days. (Round to two decimal places.) What is JPJs fixed asset...
2) Queens Corporation (QC) purchases a $5 million machine. The machine will be depreciated by $1 million per year over 5 years, starting this year. Suppose QC's tax rate is 25%. a) What impact will the cost of the purchase have on earnings during the first year? b) What impact will the cost of the purchase have in the firm's cash flow during the first year?
2) Queens Corporation (QC) purchases a $5 million machine. The machine will be depreciated...
2) Queens Corporation (QC) purchases a $5 million machine. The machine will be depreciated by $1 million per year over 5 years, starting this year. Suppose QC's tax rate is 25%. a) What impact will the cost of the purchase have on earnings during the first year? b) What impact will the cost of the purchase have in the firm's cash flow during the first year? 3) A philanthropist wants to fund a prize to be awarded annually in perpetuity...
Sora Industries has 63 million outstanding shares, $130 million
in debt, $55 million in cash, and the following projected free cash
flow for the next four years:
2 516.0 154.4 Year 1 Earnings and FCF Forecast ($ million) Sales 433.0 468.0 Growth vs. Prior Year Cost of Goods Sold Gross Profit Selling, General, & Admin. Depreciation EBIT 53.8 Less: Income Tax at 40% Plus: Depreciation Less: Capital Expenditures Less: Increase in NWC Free Cash Flow (7.0) 59.6 547.0 574.3 8.1%...
Sora Industries has 6868 million outstanding shares, $120
million in debt, $49 million in cash, and the following projected
free cash flow for the next four years: a. Suppose Sora's revenue
and free cash flow are expected to grow at a 4.4% rate beyond year
4. If Sora's weighted average cost of capital is 11.0% , what is
the value of Sora's stock based on this information? b. Sora's cost
of goods sold was assumed to be 67% of sales....
Sora Industries has 64 million outstanding shares, $127 million in debt, $42 million in cash, and the following projected free cash flow for the next four years: Year 0 1 2 3 4 5 Earnings and FCF Forecast ($ million) 1 Sales 433.0 468.0 516.0 547.0 574.3 2 Growth vs. Prior Year 8.1% 10.3% 6.0% 5.0% 3 Cost of Goods Sold (313.6) (345.7) (366.5) (384.8) 4 Gross Profit 154.4 170.3 180.5 189.5 5 Selling, General, & Admin. (93.6) (103.2) (109.4)...
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