Fi_1 - double its depreciation expense for the upcoming...

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1.  SCENARIO 3-2 Last year, Sharpe Radios had a net operating profit after-taxes (NOPAT) of $7.8 million. Its EBITDA was $15.5 million and net income was $3.8 million. During the year, Sharpe Radios made $5.5 million in net capital expenditures. Finally, Sharpe Radios' finance staff has concluded that the firm's total after-tax capital costs were $5.9 million and its tax rate was 40%. What is Sharpe Radios' depreciation and amortization expense? A.)$2.5 million 2.  B.) Assume that Congress recently passed a provision that will enable Piazza Cola to
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Unformatted text preview: double its depreciation expense for the upcoming year but will have no effect on its sales revenue or tax rate. Prior to the new provision, Piazza's net income after taxes was forecasted to be $4 million. Which of the following best describes the impact of the new provision on Piazza's financial statements versus the statements without the provision? Assume that the company uses the same depreciation for tax and stockholder reporting purposes. A.) E) Net fixed assets on the balance sheet will decrease....
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This note was uploaded on 11/04/2009 for the course BUS FIN 2100 taught by Professor Shmidl during the Spring '09 term at Laramie County Community College.

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