The Rogers Corporation has a gross profit of $760,000 and $306,000 in depreciation expense. The Evans...
The Rogers Corporation has a gross profit of $760,000 and
$306,000 in depreciation expense. The Evans Corporation also has
$760,000 in gross profit, with $42,000 in depreciation expense.
Selling and administrative expense is $230,000 for each
company.
a. Given that the tax rate is 40 percent, compute
the cash flow for both companies.
rogers =
evans =
b. Calculate the difference in cash flow between
the two firms.
Homework Answers
As depreciation is tax deductible, it is first deducted from Gross profit, then it is added back to Net income after tax as it is not actually an expenditure in cash.
a) Cash flow for Rogers is $440,400 and for Evans is $334,800
b) Difference is cash flow is $440,400 - $334,800 = $105,600
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The Rogers Corporation has a gross profit of $760,000 and
$306,000 in depreciation expense. The Evans...
The Rogers Corporation has a gross profit of $760,000 and $306,000 in depreciation expense. The Evans...
The Rogers Corporation has a gross profit of $760,000 and $306,000 in depreciation expense. The Evans Corporation also has $760,000 in gross profit, with $42,000 in depreciation expense. Selling and administrative expense is $230,000 for each company a. Given that the tax rate is 40 percent, compute the cash flow for both companies. Rogers Evans Cash flow b. Calculate the difference in cash flow between the two firms. Difference in cash flow
The Rogers Corporation has a gross profit of $798,000 and $300,000 in depreciation expense. The Evans...
The Rogers Corporation has a gross profit of $798,000 and $300,000 in depreciation expense. The Evans Corporation also has $798,000 in gross profit, with $45,900 in depreciation expense. Selling and administrative expense is $216,000 for each company. a. Given that the tax rate is 40 percent, compute the cash flow for both companies. b. Calculate the difference in cash flow between the two firms.
The Rogers Corporation has a gross profit of $709,000 and $254,000 in depreciation expense. The Evans...
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The Rogers Corporation has a gross profit of $760,000 and $306,000 in depreciation expense. The Evans Corporation also has $760,000 in gross profit, with $42,000 in depreciation expense. Selling and administrative expense is $230,000 for each company a. Given that the tax rate is 40 percent, compute the cash flow for both companies. Rogers Evans Cash flow b. Calculate the difference in cash flow between the two firms. Difference in cash flow
20.00 points The Rogers Corporation has a gross profit of $707,000 and $329,000 in depreciation expense. The Evans Corporation also has $707,000 in gross profit, with $44,800 in depreciation expense. Selling and administrative expense is $176,000 for each company a. Given that the tax rate is 40 percent, compute the cash flow for both companies. Rogers Evans Cash flow b. Calculate the difference in cash flow between the two firms. Difference in cash flow
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