Question

1. XYZ Corp. expects the following revenues, cash expenses, and depreciation charges in the future: Year...

1. XYZ Corp. expects the following revenues, cash expenses, and depreciation charges in the future:

Year 1 2 3

Revenues $89,000 $106,000 $145,000

Cost of goods sold $38,000 $ 49,000 $53,000

Selling expenses $11,000 $ 13,000 $14,000

Interest expense $21,000 $ 23,000 $24,000

Interest revenue $7,000 $ 9,000 $11,000

Other cash operating expense$10,000 $ 11,000 $12,000

Depreciation $ 9,500 $ 13,500 $15,000

This business is in the 22 percent tax bracket. Please compute the after-tax cash flows from operations for each of the years. After tax operating cash flow for Year 1_____________ Year 2___________Year 3___________

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Answer #1
Year 1 Year 2 Year 3
Revenues 89000 106000 145000
Less: Cost of Goods Sold 38000 49000 53000
Less: Selling Expenses 11000 13000 14000
Less: Interest Expense 21000 23000 24000
Add: Interest Revenue 7000 9000 11000
Less: Other Cash Operating Expense 10000 11000 12000
Less: Depreciation 9500 13500 15000
Profit Before Tax 6500 5500 38000
Less: Tax@22% 1430 1210 8360
Profit After Tax 5070 4290 29640
Add: Depreciation 9500 13500 15000
Net Cash Flow 14570 17790 44640
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