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# Accounting - 1 Determine after tax cash inflow \$1,000,000...

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Determining Cash Flows Expanded info on Chp 12 PowerPoint This problem is a PowerPoint slide for Chapter 12. Following is a three step approach to determining the “net cash after tax inflows” to use in the present value calculation. Hamill’s cash sales for the year are expected to be \$1,000,000. Hamill expects to have \$330,000 of cash operating expenses (wages, rent, interest, etc.) and \$70,000 of depreciation expense. If Hamill’s tax rate is 25%, what are its projected after-tax cash flows?
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Unformatted text preview: 1. Determine after tax cash inflow: \$1,000,000 cash sales (1 – tax rate)= \$1,000,000 (1-.25)=\$1,000,000(.75)= \$750,000 2. Determine after tax cash outflow: \$330,000 cash expenses (1 – tax rate)= \$330,000 (1-.25)=\$330,000(.75)= (\$247,500) 3. Determine depreciation tax shield: \$70,000 depreciation (tax rate) = \$70,000 (.25) = \$ 17,500 After tax net cash inflows to use for present value calculation \$520,000...
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