« previous next »

Author Question: Simpson Productions Inc. had net sales of 300,000, costs of sales of 150,000, additional expenses of ... (Read 71 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?

To prove that stomach ulcers were caused by bacteria and not by stress, a researcher consumed an entire laboratory beaker full of bacterial culture. After this, he did indeed develop stomach ulcers, and won the Nobel Prize for his discovery.

Did you know?

In 1886, William Bates reported on the discovery of a substance produced by the adrenal gland that turned out to be epinephrine (adrenaline). In 1904, this drug was first artificially synthesized by Friedrich Stolz.

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?

Drug-induced pharmacodynamic effects manifested in older adults include drug-induced renal toxicity, which can be a major factor when these adults are experiencing other kidney problems.

Did you know?

After 5 years of being diagnosed with rheumatoid arthritis, one every three patients will no longer be able to work.

Formation of additional eyes in Drosophila caused by the abnormal expression of a master control gen Formation of additional eyes in Drosophila caused by the abnormal expression of a master control gen
Health Care Costs for the Elderly and Disabled Health Care Costs for the Elderly and Disabled
Standard precaution guidelines. Additional guidelines/protocols may be utilized depending on the ... Standard precaution guidelines. Additional guidelines/protocols may be utilized depending on the ...
Simpson's Puzzle Simpson's Puzzle
Dagny Taggart is a graduating college senior and she is considering the costs of going to ... Dagny Taggart is a graduating college senior and she is considering the costs of going to ...
Rapidly decreasing sequence costs have enabled the rapid expansion Rapidly decreasing sequence costs have enabled the rapid expansion
Video: Chemical Equilibrium between N2O4 (colorless gas) and NO2 (brown gas)

For a complete list of videos, visit our video library