Question
In: Finance
The owner of a bicycle repair shop forecasts revenues of $236,000 a year. Variable costs will...
|
The owner of a bicycle repair shop forecasts revenues of $236,000 a year. Variable costs will be $69,000, and rental costs for the shop are $49,000 a year. Depreciation on the repair tools will be $29,000. The tax rate is 40%. |
| a. |
Calculate operating cash flow for the year by using all three methods: (a) adjusted accounting profits; (b) cash inflow/cash outflow analysis; and (c) the depreciation tax shield approach. |
| Method | Operating Cash Flow |
| Adjusted accounting profits | $ |
| Cash inflow/cash outflow analysis | |
| Depreciation tax shield approach | |
| b. | Are the above answers equal? |
|
Solutions
jeff jeffy answered 4 months agoRelated Solutions
The owner of a bicycle repair shop forecasts revenues of $236,000 a year. Variable costs will...
The owner of a bicycle repair shop forecasts revenues of
$236,000 a year. Variable costs will be $69,000, and rental costs
for the shop are $49,000 a year. Depreciation on the repair tools
will be $29,000. The tax rate is 40%.
a.
Calculate operating cash flow for the year by using all three
methods: (a) adjusted accounting profits; (b) cash inflow/cash
outflow analysis; and (c) the depreciation tax shield approach.
Method
Operating Cash Flow
Adjusted accounting profits
$
Cash inflow/cash...
The owner of a bicycle repair shop forecasts revenues of $160,000 a year. Variable costs will...
The owner of a bicycle repair shop forecasts revenues of
$160,000 a year. Variable costs will be $50,000, and rental costs
for the shop are $30,000 a year. Depreciation on the repair tools
will be $10,000.
a. Prepare an income statement for the shop
based on these estimates. The tax rate is 20%.
Dollars in minus dollars out.
Adjusted accounting profits.
Add back depreciation tax shield.
b. Calculate the operating cash flow for the
repair shop using the three methods...
The owner of a bicycle repair shop forecasts revenues of $180,000 a year. Variable costs will...
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for the shop are $35000 a year. Depreciation on the repair tools
will be $15000
a. Prepare an income statement for the shop based on these
estimates. The tax rate is 20%
b. Calculate the Operating cash flow for the repair shop using
three methods given below
dollars in minus dollars out
adjusted accounting profits
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The owner of a bicycle repair shop forecasts revenues of $200,000 a year. Variable costs will...
The owner of a bicycle repair shop forecasts revenues of
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b. Calculate the operating cash flow for the
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Now calculate the operating cash
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Dollars in minus dollars out.
Adjusted accounting profits.
Add back depreciation tax shield.
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The owner of a bicycle repair shop forecasts revenues of
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will be $26,000. Prepare an income statement for the shop based on
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for the year by using all three methods: (a) Dollars in minus
dollars out; (b) Adjusted accounting profits; and (c) Add back
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The owner of a bicycle repair shop forecasts revenues of 216000 a year.
The owner of a bicycle repair shop forecasts revenues of 216000
a year. Variables cost will be $64000 rental cost for the shop are
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Prepare an income statement for the shop base on the estimate. Tax
rate is 20% B. Calculate the operating cash flow for the repair
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Your friend owns a bicycle shop that derives most of its revenues from repair and maintenance...
Your friend owns a bicycle shop that derives most of its
revenues from repair and maintenance services. Her services range
from simple tune-ups to complex rebuilding of racing and mountain
bikes. She has four employees who work at the shop and she rents
the building that the business operates out of.
Respond to the following questions:
1.) List two specific major costs of operations that would be
considered to be direct costs, and explain your reasoning.
2.) The shop served...
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Owner of an auto repair shop hires Contractor to remodel his
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Owner and the army has a liquidated damages clause calling for $300
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Assuming volume decreases 10%, what will revenues, variable costs and fixed costs be in year 2?
Consider the same company one more time:Revenues: 500Variable Costs 250Fixed Costs 1001. Assuming volume decreases 10%, what will revenues, variable
costs and fixed costsbe in year 2? What will operating income be? What will the
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What will theoperating margin be in year 2?
The following information on maintenance and repair costs and revenues for the last two years is...
The following information on maintenance and repair costs and
revenues for the last two years is available from the accounting
records at Arnie’s Arcade & Video Palace. Arnie has asked you
to help him understand the relation between business volume and
maintenance and repair cost.
Month
Maintenance and Repair Cost ($000)
Revenues ($000)
July
$2.31
$59.00
August
3.28
53.00
September
2.80
49.00
October
2.21
65.00
November
2.30
77.00
December
1.14
105.00
January
3.12
45.00
February
3.16
51.00
March
3.02
61.00...
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