« previous next »

Author Question: Simpson Productions Inc. had net sales of 300,000, costs of sales of 150,000, additional expenses of ... (Read 57 times)

notis

  • Hero Member
  • *****
  • Posts: 596
on: Jul 11, 2018
Simpson Productions Inc. had net sales of 300,000, costs of sales of 150,000, additional expenses of 100,000, depreciation of 50,000, and a tax rate of 30. Use this information to determine the firm's after tax earnings on a cash basis.
 
  A) 0
  B) 30,000
  C) 35,000
  D) 50,000

Question 2

You are considering prepaying an installment loan you took out several months ago. The lender has provided you with the following information.
 
  remaining months to pay 10
  loan payoff 851.29
  monthly payments 95.
 
  00
  balance due in last month of the loan 95.00
  remaining interest on the loan 98.71
 
  You believe you can earn an annual after-tax rate of rate of 16 on your investments in each of the next ten months (1.33 a month). Given the above information, you should
  A)
 
  prepay the loan; your net gain will be about 35.62.
  B)
 
  not prepay the loan; your net gain will be about 35.62.
  C)
 
  prepay the loan; your net gain will be about 14.80.
  D)
 
  not prepay the loan; your net gain will be about 14.80.


Carissamariew

  • Sr. Member
  • ****
  • Posts: 359
Reply #1 on: Jul 11, 2018
Answer to Question 1

D
Explanation: D) After-tax cash flow = (Sales - COGS - Dep)(1 - t) + Dep = (300,000 - 150,000 - 100,000 - 50,000 )(1-.30 ) + 50,000 = 50,000.

Answer to Question 2

A


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Hypertension is a silent killer because it is deadly and has no significant early symptoms. The danger from hypertension is the extra load on the heart, which can lead to hypertensive heart disease and kidney damage. This occurs without any major symptoms until the high blood pressure becomes extreme. Regular blood pressure checks are an important method of catching hypertension before it can kill you.

Did you know?

Only one in 10 cancer deaths is caused by the primary tumor. The vast majority of cancer mortality is caused by cells breaking away from the main tumor and metastasizing to other parts of the body, such as the brain, bones, or liver.

Did you know?

If you use artificial sweeteners, such as cyclamates, your eyes may be more sensitive to light. Other factors that will make your eyes more sensitive to light include use of antibiotics, oral contraceptives, hypertension medications, diuretics, and antidiabetic medications.

Did you know?

Hip fractures are the most serious consequences of osteoporosis. The incidence of hip fractures increases with each decade among patients in their 60s to patients in their 90s for both women and men of all populations. Men and women older than 80 years of age show the highest incidence of hip fractures.

Did you know?

Patients should never assume they are being given the appropriate drugs. They should make sure they know which drugs are being prescribed, and always double-check that the drugs received match the prescription.

Osteoporosis. (a) A section through normal spongy bone. (b) A section through a bone with osteoporos Osteoporosis. (a) A section through normal spongy bone. (b) A section through a bone with osteoporos
Increasing Costs of Natural Disasters Increasing Costs of Natural Disasters
Economic Costs of CVD Economic Costs of CVD
The Brain and Alcohol As you consume more alcohol, additional areas of your brain are affected The Brain and Alcohol As you consume more alcohol, additional areas of your brain are affected
How the cortical reaction in a mouse egg is thought to prevent additional sperm from entering the eg How the cortical reaction in a mouse egg is thought to prevent additional sperm from entering the eg
Graph approximated by two parabolas for the Simpson's rule Graph approximated by two parabolas for the Simpson's rule
Video: Dorsal Recumbent Position

For a complete list of videos, visit our video library