Reference no: EM131931946
Question: Ace manufacturing Inc., is preparing pro forma financial statements for 2016.
Sales: $2,000,000 Less; Cost of goods sold: $1,200,000 Gross profit: $800000 Less: Selling expense: $200000 General &administrative expense: $60000 Less: Depreciation: $40000 Operating profit: $500000 Less: Interest: $80000 Earnings before taxes: $420000 Less: Taxes(40%): $168000 Net profit after taxes/EACS: $252000
1. If the firm utilizers the percent of sales method to estimate costs for the next year, and projects sales to increase to $2.4 million in 2016 and is in the 40 percent tax rate, what will its net profits be after taxes?
2. If the firm believe that 200000 of the cost of goods sold and 40000 of selling expense are fixed costs, and the interest expense and dividends are not expected to change, what is the projected net profits after taxes?
3. Why is there a difference, and what does this teach you?
|
Find the value of the option to abandon the project
: Using the information in the preceding problem, find the expected NPV of this project when taking the abandonment option into account.
|
|
What was your return measured in US dollars
: On January 28, 2015, the exchange rate was $1.1310/€. As a U.S. investor, if you had purchased the Greek bonds at issuance (on January 28, 2014).
|
|
Scalpers trade to capture profits from minute fluctuations
: Scalpers trade to capture profits from minute fluctuations in futures prices. Explain how this avaricious behavior benefits others.
|
|
What do you think about mathias argument
: CASE STUDY - SENIOR CARE ENTERPRISES BOND REFUNDING - What do you think about Mathias' argument, what are three key learning points illustrated in the case
|
|
What is the projected net profits after taxes
: If the firm believe that 200000 of the cost of goods sold and 40000 of selling expense are fixed costs, and the interest expense and dividends are not expected.
|
|
How much money can you withdraw in equal annual cash flows
: You have accumulated $800,000 for your retirement. How much money can you withdraw in equal annual beginning-of- the-year cash flows if you invest the money.
|
|
Calculating the present value of the cash flows
: You have accumulated some money for your retirement. You are going to withdraw $57,103 every year at the beginning of the year for next 18 years starting.
|
|
Determine if the purchase of van is economically feasible
: ACME is considering purchasing a new van to deliver its products. The van will cost $18,000. It is anticipated that the van will be used for 6 years.
|
|
What is the current pre-tax value of your region to company
: Need help in solving a case study. Case - Strategic Software Sales Staffing - What is the current pre-tax value of your region to the company
|