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nikdorinn
22 days ago
14

Champagne, inc., had revenues of $12 million, cash operating expenses of $8 million, and depreciation and amortization of $1.5 m

illion during 2008. the firm purchased $700,000 of equipment during the year while increasing its inventory by $500,000 (with no corresponding increase in current liabilities). the marginal tax rate for champagne is 30 percent. free cash flow: what is champagne's free cash flow for 2008? $4,000,000 $3,250,000 $2,050,000 $2,500,000
Business
1 answer:
harina [3.2K]22 days ago
4 0

The calculation for free cash flow can be summarized as follows:

Revenue 12000000

Subtract: Expense (8000000)

Subtract: Depreciation (1500000)

Earnings Before Tax 2500000

Subtract Tax (750000)

Earnings after tax 1750000

Add Depreciation 1500000

Total Cash Earnings 3250000

Subtract: Change in Working Capital (500000)

Subtract: Asset Purchase (700000)

Free Cash Flow 2050000

Therefore, Free Cash Flow can be computed in this manner.

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Suppose that you enter into a short futures contract to sell July silver for $17.20 per ounce. The size of the contract is 5,000
Mariulka [3182]
$0.20 Explanation: To determine the adjustment in the future price, the initial step is calculating the loss, as follows: Loss = Initial Margin - Maintenance Margin = $4,000 - $3,000 = $1,000. The future price adjustment will then be Loss divided by the size of the contract, returning to $1,000 ÷ 5,000 ounces = $0.20. Thus, the future price rises by $0.20. If the margin call isn't satisfied, the broker will step in at the maximum price to prevent additional losses.
7 0
22 days ago
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Allo Foundation, a tax-exempt organization, invested $200,000 in cost-saving equipment. The equipment has a five-year useful lif
harina [3228]

Answer:

Net Present Value = $ 34,310.45  

Explanation:

The Net Present Value (NPV) represents the difference between the present value of cash inflows and outflows. A positive NPV indicates a favorable investment decision, while a negative value suggests otherwise.

NPV of a project

NPV = Present Value of Cash inflows - Present Value of Cash outflow  

The cash inflow is characterized as an annuity.

Present Value of annuity= A × 1 - (1+r)^(-n)/r  

A refers to Annual cash flow, - 65,000, r is the discount rate at 12%, and the term is 5 years.

Calculation for Present Value of cash inflow equals 65,000 × (1 - (1.12)^(-5)/0.12) =  234,310.45.

The initial investment is 200,000.

Thus, the Net Present Value calculation is  -  234,310.45  -200,000 = 34,310.45  

Net Present Value = $ 34,310.45  

4 0
1 month ago
You buy 50 stocks of Company A, 30 of Company B, and 20 of Company C. The annual returns of these companies are 8%, 12%, and 10%
stepan [3001]

Response:

The yearly average return stands at 9.6 %

Clarification:

Calculating the average return

Assuming the price per share is 100

                                                       Initial    Growth             Final

                                                         Value            %                   Value

Company A  50 % at 100                5,000              8 %                 5,400

Company B 30 % at 100                 3,000              12 %                3,360    

Company C 20 % at 100                  2,000             10 %                2,200

Total amounts                             10,000                                     10,960

To find the average return, take the increase in value over the base, divided by the base

10,960 -  10,000  =  960/ 10000  = 9.6 % average return

3 0
22 days ago
According to physicist and philosopher Albert Einstein, "Nothing will benefit human health and increase chances of survival of l
marusya05 [3096]

Answer:

I concur with the statement made. Recent studies indicate that beef production is significantly taxing on freshwater resources (approximately 200 liters of water are required per kg of beef).

Explanation: Observing the current global climate change and the numerous species, aside from humans, facing extinction due to these environmental shifts strengthens my agreement with this perspective. Nevertheless, I find it challenging to alter my eating habits and find it hard to reduce meat consumption. I believe a key element for behavioral change is to establish varying stages, and many individuals like myself could benefit from a gradual approach to align consumption habits with a more conscious lifestyle.

6 0
24 days ago
Which of the following is an example of external-operational communication?
Mariulka [3182]

Response:

c. Advertisements published by companies on their websites for the general public

Explanation:

External-operational communication is characterized as dialogue, interaction, or correspondence related to work that a business entity conducts with individuals or groups, such as customers, government bodies, suppliers, etc., external to the organization.

An example of external-operational communication is the advertisements that companies display on their websites targeting the general public.

4 0
13 days ago
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