Question

Assume a corporation has earnings before amortization and taxes (EBAT) of $100,000 and amortization of $10,000, and it has a 34 percent tax rate.

a. Compute its cash flow.

Cash flow $

b. Compute the difference in cash flow, If there was $50,000 in amortization.

Difference in cash flow $

Answer #1

Assume a corporation has earnings before amortization and taxes
(EBAT) of $100,000 and amortization of $10,000, and it has a 34
percent tax rate.
a. Compute its cash flow. Cash flow $
b. Compute the difference in cash flow, If there was $50,000 in
amortization. Difference in cash flow $

Assume a corporation has earnings before depreciation and taxes
of $150,000, depreciation of $55,000, and a 40% tax bracket. a.
compute its cash flow using this format: Earnings before Dep &
Taxes Depreciation Earnings before Taxes Taxes Earnings after Taxes
Depreciation b. Compute cash flow if depreciation is only $30,000
c. How much cash flow is lost due to the reduction of
depreciation?

Assume a corporation has earnings before depreciation and taxes
of $126,000, depreciation of $42,000, and that it has a 35 percent
tax bracket.
a. Compute its cash flow using the following
format. (Input all answers as positive values.)
Earnings before depreciation and
taxes
Depreciation
Earnings before taxes
Taxes
Earnings after taxes
Depreciation
Cash flow
b. How much would cash flow be if there were only
$16,000 in depreciation? All other factors are the same.
Cash flow
c....

Assume a corporation has earnings before depreciation and taxes
of $125,000, depreciation of $40,000, and that it has a 30 percent
tax bracket.
a. Compute its cash flow using the following format. (Input all
answers as positive values.)
25,487 answers
PArticulars
Amount($)
earnings before depreciation
and taxes
Less:depreciation
Earnings before tax
Less:tax@30%
Net income
b. How much would cash flow be if there were only $15,000 in
depreciation? All other factors are the same. c. How much cash flow
is...

Assume a firm has earnings before depreciation and taxes of
$550,000 and no depreciation. It is in a 40 percent tax
bracket.
a. Compute its cash flow.
b. Assume it has $550,000 in depreciation.
Recompute its cash flow.
c. How large a cash flow benefit did the
depreciation provide?

1/ Assume a corporation has earnings before depreciation and
taxes of $105,000, depreciation of $45,000, and that it has a 35
percent tax bracket. What are the after-tax cash flows for the
company?
$87,800
$88,600
$78,800
$84,000
2/ The Wet Corp. has an investment project that will reduce
expenses by $20,000 per year for 3 years. The project's cost is
$30,000. If the asset is part of the 3-year MACRS category (33.33%
first year depreciation) and the company's tax rate...

Multinational Co. (MNC) generated $1,500 million in domestic
earnings before interest, taxes, and amortization (EBITA). MNC
amortizes intangible assets at $275 million per year and takes a
$160 million interest expense. MNC's statutory (domestic) tax rate
is 21.5 percent on earnings before taxes, but only 15 percent on
foreign operations. MNC has $150 million of pre-tax foreign income
and generates $35 million in ongoing research and development
(R&D) tax credits. What is its effective tax rate on pre-tax
profits? a)...

Enoch-Arden Corporation has earnings before interest and taxes
of $3 million and a 40 percent tax rate. It is able to borrow at an
interest rate of 14 percent, whereas its equity capitalization rate
in the absence of borrowing is 18 percent. The earnings of the
company are not expected to grow, and all earnings are paid out to
shareholders in the form of dividends. In the presence of corporate
but no personal taxes, what is the value of the...

Jemisen's firm has expected earnings before interest and taxes
of $1,400. Its unlevered cost of capital is 13 percent and its tax
rate is 34 percent. The firm has debt with both a book and a face
value of $1,800. This debt has a 7 percent coupon and pays interest
annually. What is the firm's weighted average cost of capital?
A) 12.03 percent
B) 12.88 percent
C) 12.50 percent
D) 11.97 percent
E) 12.20 percent

Assume a project has earnings before depreciation and taxes of
$15,000, depreciation of $25,000, and that the firm has a 25% tax
bracket. What are the after-tax cash flows for the project?
Seleccione una: a. $15,000 b. $17,500 c. $28,000 d. $17,000 e.
($21,000) f. $19,000 g. $18,000 h. Can't be determined

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