AccountingProblems

AccountingProblems - IncomeStatement2 Sales $7,500,000...

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IncomeStatement1 $1,400,000 Sales $11,500,000 Other Costs 70% T 40% Sales $11,500,000 COGS ($8,050,000) EBITDA $3,450,000 $3,450,000 Depreciation ($1,400,000) ($2,100,000) EBIT $2,050,000 $1,350,000 INT $0 $0 EBT $2,050,000 $1,350,000 TAX ($820,000) ($540,000) NI $1,230,000 $810,000 What is the net Cash Flow for Riley Routers Company? Net Cash Flow $2,630,000 If a new tax law increased depreciation by 50%, what would be the new net cash flow? Net Cash Flow $2,910,000 Riley Routers Company projects this year's sales to be $11.5 million. Depreciation and Amortization are expected to be $1.4 million with all other costs expected to be 70% of sales. All receipts and payments are in the form of cash. There is no debt. Riley's tax rate is 40%. Dep. & Amort.
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Unformatted text preview: IncomeStatement2 Sales $7,500,000 $10,798,077 T 35% COGS $3,900,000 0.52 $5,615,000 10% EBITDA $3,600,000 $5,183,077 Depreciation $1,100,000 $1,210,000 EBIT $2,500,000 $3,973,077 INT $500,000 $550,000 EBT $2,000,000 $3,423,077 TAX $700,000 $1,198,077 NI $1,300,000 $2,225,000 The CFO of EsterInc. has forecasted the following Income Statement for the coming year. The CFO has hired you to find a way to have higher sales leading to Net Income of $2,225,000. Assume that operating costs are always the same percentage of sales and interest expense and depreciation will each rise by 10% and the tax rate remains at 35%. What level would sales have to be to generate the desired level of Net Income? ∆ r...
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This note was uploaded on 10/16/2010 for the course B&E FIN 500 taught by Professor Speaker during the Spring '10 term at WVU.

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AccountingProblems - IncomeStatement2 Sales $7,500,000...

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