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Assume a corporation has earnings before amortization and taxes (EBAT) of $106,000 and amortization of $44,000,...

Assume a corporation has earnings before amortization and taxes (EBAT) of $106,000 and amortization of $44,000, and it has a 40 percent tax rate.

Compute its cash flow. (Input all answers as positive values.)

  

        
  Earnings before amortization and taxes $   
  Amortization      
  Earnings before taxes $   
  Taxes @ 40%   
  Earnings after taxes $   
  Amortization      
  Cash flow $   
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Answer #1

HI

Here

Earnings before amortization and taxes $ 106,000
  Amortization    44,000
  Earnings before taxes $ 62,000 (EBAT-amort)
  Taxes @ 40%    =62000*40% = $24,800
  Earnings after taxes =62000 - 24800 = $37,200   
  Amortization =$44,000   

  Cash flow

Thanks

 =$37200 + 44000 = $81,200   
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