Calculate operating cash flow for year

Assignment Help Financial Management
Reference no: EM131924410

The owner of a bicycle repair shop forecasts revenues of $240,000 a year. Variable costs will be $70,000, and rental costs for the shop are $50,000 a year. Depreciation on the repair tools will be $30,000. The tax rate is 30%. a. Calculate operating cash flow for the year by using all three methods: (a) adjusted accounting profits; (b) cash inflow/cash outflow analysis; and (c) the depreciation tax shield approach. Method Operating Cash Flow Adjusted accounting profits $ Cash inflow/cash outflow analysis Depreciation tax shield approach b. Are the above answers equal? Yes No

Reference no: EM131924410

Questions Cloud

Summarize the firms history that affect it most : Select a Global Fortune 500 company (it cannot be a company you work for) that operates in the United States and in other nations around the world.
The accounting and NPV break-even levels of sales : What will be the accounting and NPV break-even levels of sales, if the firm's tax rate is 40%?
What are the strengths of the advertisement : What is the goal of the advertisement? Is it successful? Explain with specific examples from the ad. What are the strengths of the advertisement?
What is the stock price of MEP : How much money does MEP receive? What is the stock price of MEP?
Calculate operating cash flow for year : Calculate operating cash flow for the year by using all three methods:
What were the benefits of doing this for china : Why do you think the Chinese government originally pegged the value of the Yuan against the U.S. dollar?
What is the company target debt-equity ratio : The company's cost of equity is 14 percent, and its pretax cost of debt is 8 percent. The tax rate is 38 percent. What is the company's target debt-equity ratio
What are the opportunities of strategies followed by pepsi : Using Porter's five industry forces, map the soft-drink industry. What are the risks and opportunities of the strategies followed by Pepsi? Of Coca-Cola?
Describe the dispute resolution processes your workplace : Discuss and describe the dispute resolution processes your workplace (or former workplace) uses.

Reviews

Write a Review

Financial Management Questions & Answers

  About call option on stock in the black-scholes

You are given the following information about a call option on a stock in the Black-Scholes framework:

  How financially healthy is this company

According to the balance sheet from 2015 annual report and 2016 proxy statement of Dollar General Corporation listed below: year 2016 year 2015 Assets year 2016 year 2015 total current assets $3,432,410 $3,532,609 net property and equipment $2,264,06..

  Example of diversifiable risk

Which one of the following is an example of diversifiable risk?

  Between revenue synergies and cost synergies

Between revenue synergies and cost synergies, which do you believe is the more valid criterion for pursuing a merger or acquisition?

  Publicly traded companies adhere to this philosophy

Evaluate the following statement: Managers should not focus on the current stock value because doing so will lead to an overemphasis on short-term profits at the expense of long-term profits. Do most managers of publicly traded companies adhere to th..

  Which loan has the lower effective annual interest rate

which loan has the lower effective annual interest rate?

  Describe what the trends you see for your company

Describe what the trends you see for your company based on your ratio analysis. What does this mean for the company?

  Analyzing two-stock portfolio that consists of utility stock

Emmy is analyzing a two-stock portfolio that consists of a utility stock and a commodity stock.

  Percent arithmetic average return

You have found an asset with a 13.60 percent arithmetic average return and a 10.44 percent geometric return. Your observation period is 30 years. What is your best estimate of the return of the asset over the next 5 years? 10 years? 20 years?

  Calculate the net profit margin and asset turnover

A venture recorded revenue of $1 million last year and a net profit of $100,000. Total assets were $800,000 at the end of last year. Calculate the venture's net profit margin. Calculate the venture's asset turnover. Calculate the venture's return on ..

  Prepared to offer the job to another top candidate

you are prepared to offer the job to another top candidate if Ashley is unable to start in two weeks at the salary you stated in the letter.

  Capital structures-equity plan and levered plan

Rise Against Corporation is comparing two different capital structures: an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 200,000 shares of stock outstanding. Under Plan II, there would be 150,000 shares o..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd