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п HW Ch 10 G Sved Help 3 Fill in the missing numbers for the following income statement. (Do not round intermediate calculati
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Answer #1

(a) EBIT = Sales - Cost - Depreciation

EBIT = $666800 - $429200 - $102800

EBIT = $134800

Taxes = 21% * EBIT

Taxes = 21% * $134800

Taxes = $28308

Net income = EBIT - Taxes

Net income = $134800 - $28308

Net income = $106492

(b) Calculation of operating cash flow:

Operating cash flow = Net income + Depreciation

Operating cash flow = $106492 + $102800 = $209292

(c) Depreciation tax shield = Depreciation * Tax rate

Depreciation tax shield = $102800 * 21%

Depreciation tax shield = $21588

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