Question
In: Finance
Year 1 Year 2 Revenues 126.1126.1 155.6155.6 COGS and Operating Expenses (other than depreciation) 36.236.2 57.157.1...
|
Year 1 |
Year 2 |
||
|
Revenues |
126.1126.1 |
155.6155.6 |
|
|
COGS and Operating Expenses (other than depreciation) |
36.236.2 |
57.157.1 |
|
|
Depreciation |
28.128.1 |
39.139.1 |
|
|
Increase in Net Working Capital |
2.32.3 |
8.68.6 |
|
|
Capital Expenditures |
28.528.5 |
37.637.6 |
|
|
Marginal Corporate Tax Rate |
3535% |
3535% |
a. What are the incremental earnings for this project for years 1 and 2? (Note: Assume any incremental cost of goods sold is included as part of operating expenses.)
b. What are the free cash flows for this project for years 1 and 2?
a. What are the incremental earnings for this project for years 1 and 2? (Note: Assume any incremental cost of goods sold is included as part of operating expenses.)
Calculate the incremental earnings of this project below: (Round to one decimal place.)
|
Incremental Earnings Forecast (millions) |
Year 1 |
|
|
Sales |
$ |
|
|
Operating Expenses |
$ |
|
|
Depreciation |
$ |
|
|
EBIT |
$ |
|
|
Income tax at 35% |
$ |
|
|
Unlevered Net Income |
$ |
Solutions
jeff jeffy answered 1 month agoRelated Solutions
Year 1 Year 2 Revenues 128.9 151.6 COGS and Operating Expenses (other than depreciation) 49.6 52.7...
Year 1 Year 2
Revenues 128.9 151.6
COGS and Operating Expenses (other than depreciation) 49.6
52.7
Depreciation 24.9 43.5
Increase in Net Working Capital 3.4 8.1
Capital Expenditures 27.3 43.2
Marginal Corporate Tax Rate 35% 35%
a. What are the incremental earnings for this project for years
1 and 2? (Note: Assume any incremental cost of goods sold is
included as part of operating expenses.)
b. What are the free cash flows for this project for years 1
and 2?...
Year 1 Year 2 Revenues 120.8 150.6 COGS and Operating Expenses (other than depreciation) 46.1 54.5...
Year 1
Year 2
Revenues
120.8
150.6
COGS and Operating Expenses (other than depreciation)
46.1
54.5
Depreciation
24.9
32.9
Increase in Net Working Capital
2.8
8.2
Capital Expenditures
29.2
38.4
Marginal Corporate Tax Rate
35%
35%
a. What are the incremental earnings for this project for years
1 and 2? (Note: Assume any incremental cost of goods sold is
included as part of operating expenses.)
b. What are the free cash flows for this project for years 1
and 2?
Revenues −Manufacturing Expenses −Marketing Expenses −Depreciation Year 0 Years 1 to 10 3.9 −0.5 −0.15 −0.4...
Revenues
−Manufacturing
Expenses
−Marketing
Expenses
−Depreciation
Year 0
Years 1 to 10
3.9
−0.5
−0.15
−0.4
=EBIT
−Taxes
(40%)
2.85
−1.14
=Unlevered net income
+Depreciation
−Additions
to Net Working Capital
−Capital
Expenditures
−7
1.71
+0.4
−0.4
=Free Cash Flow
1.71
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Year 1 2 3
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ther cash operating expenses $10,000 $ 11,000 $12,000
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1. Calculate Revenues, COGS, Gross Profit and Gross Margin in
year 2 based on the
following:
Yr. 1
Revenues 500
COGS 400
Gross Profit 100
Gross Margin 20%
Sales rise 5%, 3% due to increase in volume and 2% due to
increase in price. COGS is 80% variable.
2. What is the primary driver of sales growth for the following
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Assume COGS is 60% variable.
Yr. 1 Yr. 2
Revenues 800 850
COGS 500 519
Gross Profit...
Revenues $300,000 Less operating expenses: Rent $169,000 Insurance 15,000 Depreciation 46,000 Maintenance 20,000 250,000 Net operating...
Revenues
$300,000
Less operating expenses:
Rent
$169,000
Insurance
15,000
Depreciation
46,000
Maintenance
20,000
250,000
Net operating income
$ 50,000
1. A company has estimated the annual revenues and expenses for
a project it is considering (listed above) that will cost a total
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less.
Using the information above, what is the expected annual cash
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Last year, Michelson Manufacturing reported $10,250 of sales, $3,500 of operating costs other than depreciation, and...
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