ZuoTi.Pro
Question

Question text XYZ Company, a 'for-profit' business, had revenues of $15 million in 2018. Expenses other...

Question text

XYZ Company, a 'for-profit' business, had revenues of $15 million in 2018. Expenses other than depreciation totaled 75 percent of revenues, and depreciation expense was $1.3 million. XYZ Company, must pay taxes at a rate of 40 percent of pretax (operating) income. All revenues were collected in cash during the year, and all expenses other than depreciation were paid in cash.  

What was XYZ's total cash flow?

Hint: Look at the PowerPoint, Homework Hint, especially as it relates to the 'Depreciation Tax Shield' examples. Net Income + Depreciation

Select one or more:

a. $2,770,000

b. $4,500,000

c. $900,000

d. $2,400,000

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

a.$2,770,000

net income 15 m
less:expenses (15m*75%) (11.25m)
less:depreciation (1.3m)
income before tax 2.45m
less: tax @40% (2.45*40%) (0.98m)
net income 1.47 m
add back :depreciation 1.3 m
xyz' cash flow 2.77 m (or) 2,770,000
0 0
Add a comment
Know the answer?
Add Answer to:
Question text XYZ Company, a 'for-profit' business, had revenues of $15 million in 2018. Expenses other...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

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

  • XYZ Company, a 'for-profit' business, had revenues of $15 million in 2018. Expenses other than depreciation...

    XYZ Company, a 'for-profit' business, had revenues of $15 million in 2018. Expenses other than depreciation totaled 75 percent of revenues. XYZ Company, must pay taxes at a rate of 40 percent of pretax (operating) income. All revenues were collected in cash during the year, and all expenses other than depreciation were paid in cash.   Depreciation originally was $1.5 million; however, now the company has decided to be more conservative in its depreciation of its capital assets. XYZ now has...

  • XYZ Company, a 'for-profit' business, had revenues of $15 million in 2018. Expenses other than depreciation...

    XYZ Company, a 'for-profit' business, had revenues of $15 million in 2018. Expenses other than depreciation totaled 75 percent of revenues. XYZ Company, must pay taxes at a rate of 40 percent of pretax (operating) income. All revenues were collected in cash during the year, and all expenses other than depreciation were paid in cash.   Depreciation originally was $1.3 million; however, a change in the depreciation schedule (still within GAAP) has now made the depreciation expense DOUBLE.   Based on this...

  • XYZ Company, a 'for-profit' business, had revenues of $15 million in 2018. Expenses other than depreciation...

    XYZ Company, a 'for-profit' business, had revenues of $15 million in 2018. Expenses other than depreciation totaled 75 percent of revenues. XYZ Company, must pay taxes at a rate of 40 percent of pretax (operating) income. All revenues were collected in cash during the year, and all expenses other than depreciation were paid in cash.   Depreciation originally was $1.5 million; however, now the company has decided to be more conservative in its depreciation of its capital assets. XYZ now has...

  • XYZ Company, a 'for-profit' business, had revenues of $12 million in 2016. Expenses other than depreciation...

    XYZ Company, a 'for-profit' business, had revenues of $12 million in 2016. Expenses other than depreciation totaled 75 percent of revenues. XYZ Company, must pay taxes at a rate of 40 percent of pretax (operating) income. All revenues were collected in cash during the year, and all expenses other than depreciation were paid in cash. Depreciation originally was $1.5 million; however, now the company has decided to be more conservative in its depreciation of its capital assets. XYZ now has...

  • show all work. not through excel please 11.5 Brandywine Clinic, a not-for-profit business, had revenues of...

    show all work. not through excel please 11.5 Brandywine Clinic, a not-for-profit business, had revenues of $12 million in 2016. Expenses other than depreciation totaled 75 percent of revenues, and depreciation expense was $1.5 million. All revenues were collected in cash during the year, and all expenses other than depreciation were paid in cash. Construct Brandywine's 2016 income statement. b. What were Brandywine's net income, total profit margin, and cash flow? a. Now, suppose the company changed its depreciation calculation...

  • Brookline Specialty Hospital, a not-for-profit provider, had revenues of $12 million in 2018. Expenses other than...

    Brookline Specialty Hospital, a not-for-profit provider, had revenues of $12 million in 2018. Expenses other than depreciation totaled 75% of revenues. Brookline purchased fixed assets for $50 million in 2010 and expects to sell these assets for $20 million at the end of their 20-year lifetime. a. Calculate Brookline’s annual depreciation expense. b. Construct Brookline’s income statement for Year Ended December 31, 2018. c. Calculate Brookline’s net income, total profit margin, and approximate cash flow. In one sentence, provide an...

  • Henson Pharmaceuticals reported net income for 2018 of $4.8 million on total revenues of $44 million....

    Henson Pharmaceuticals reported net income for 2018 of $4.8 million on total revenues of $44 million. Depreciation expense totaled $930,000.   What were total cash expenses for 2018? Assume that depreciation is a non-cash expense.

  • Problem: Income Statement. The ABC Company had revenues of $925,000 in 2018. Its operating expenses (excluding...

    Problem: Income Statement. The ABC Company had revenues of $925,000 in 2018. Its operating expenses (excluding depreciation) amounted to $325,000, depreciation charges were $125,000, and interest costs totaled $55,000. If the firm pays a marginal tax rate of 34 percent, calculate its net income after taxes. Please give answer to the question with an in depth explanation that brakes down the question and the answer to the best of your capability.

  • Miami Children's Hospital reported net income for 2018 0f $9,700,120 on total revenues of $121,251,500. Depreciation...

    Miami Children's Hospital reported net income for 2018 0f $9,700,120 on total revenues of $121,251,500. Depreciation expense totaled $4,041,717. Assume that all expenses, except depreciation, were cash expenses. a. Assume the hospital is a not-for-profit corporation for parts a - c. What were total operating expenses for 2018? b. What were total cash expenses for 2018? c. What was the hospital’s 2018 cash flow? d. Now, suppose the company changed its depreciation method (still within GAAP) such that its depreciation...

  • During the year, the Russel Discount Tire Company had gross sales of $1.2 million. The firm’s...

    During the year, the Russel Discount Tire Company had gross sales of $1.2 million. The firm’s cost of goods sold and selling expenses were $450,000 and $225,000, respectively. Russel also had notes payable of $900,000. These notes carried an interest rate of 9 percent. Depreciation was $110,000. Russel's tax rate was 35 percent. 1. What was Russel's net income? 2. What was Russel’s operating cash flow?

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