Depreciation and accounting cash flow

Assignment Help Finance Basics
Reference no: EM13706123

Depreciation and accounting cash flow

A firm in the third year of depreciating its only asset, which originally cost $180,000 and has a 5-year MACRS recovery period, has gathered the following data relative to the current year's operations.

 

Accruals                $15,000

Current assets     $20,000

Interest expense $15,000

Sales revenue       400,000

Inventory                 70,000

Total costs before depreciation, interest, and taxes  290,000

Tax rate on ordinary income  40%

 

a. Use the relevant data to determine the operating cash flow (see Equations 4.2 and 4.3) for the current year.

b. Explain the impact that depreciation, as well as any other noncash charges, has on a firms cash flows.

 

Please provide your own work. Thanks.

 

Reference no: EM13706123

Questions Cloud

Review news clips from major news outlets : Review news clips from major news outlets (US or international, your choice) reporting on your selected disease, preferably produced when the outbreak was at phase 4-6 of the WHO scale.
What makes for a good investment : What makes for a good investment? Use the approximate yield formula or a financial calculator to rank the following investments according to their expected returns.
Balance sheet preparation : Adam and Arin Adams have collected their personal asset and liability information and asked you to put together a balance sheet as of December 31,2015. The following information is received from the Adams family.
Income statement preparation : On December 31,2015, Cathy Chen, a self-employed certified public accountant (CPA), completed her first full year in business. During the year, she billed $360,000 for her accounting services. She had two employees, a bookkeeper and a clerical ..
Depreciation and accounting cash flow : A firm in the third year of depreciating its only asset, which originally cost $180,000 and has a 5-year MACRS recovery period, has gathered the following data relative to the current year's operations.
What is your kantian view on social media privacy : What is your Kantian view on social media privacy?
How might congressman steve king respond : How might Congressman Steve King respond to "Brutus'" statements on natural rights? Answer in a minimum of three complete sentences using supporting evidence from the lesson.
Narration essay on one of the topics : Write a 500 word narration essay on one of the topics from the list provided below . Althoug narratives serve a variety of purposes, the most succesful ones usually share three basic characteristics: they are clearly organized in time, make a c..
Write a critical essay with an arguable thesis : The objective of the WCT is to write a critical essay with an arguable thesis. The arguable thesis statement needs to be one that you created. Currently your essay is a summary of the information in the packet, this is the number one reaso..

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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