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 5 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...
The owner of a bicycle repair shop forecasts revenues of
$180,000 a year. Variable costs will be $55,000 and rental costs
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
add back depreciation tax...
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
$200,000 a year. Variable costs will be $60,000, and rental costs
for the shop are $40,000 a year. Depreciation on the repair tools
will be $20,000.
b. Calculate the operating cash flow for the
repair shop using the three methods given below:
Now calculate the operating cash
flow.
Dollars in minus dollars out.
Adjusted accounting profits.
Add back depreciation tax shield.
The owner of a bicycle repair shop forecasts revenues of $224,000 a year. Variable costs will...
The owner of a bicycle repair shop forecasts revenues of
$224,000 a year. Variable costs will be $66,000, and rental costs
for the shop are $46,000 a year. Depreciation on the repair tools
will be $26,000. Prepare an income statement for the shop based on
these estimates. The tax rate is 40%. Calculate operating cash flow
for the year by using all three methods: (a) Dollars in minus
dollars out; (b) Adjusted accounting profits; and (c) Add back
depreciation tax...
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
44,00 a year . Depreciation on the repair tools will be $24000. A.
Prepare an income statement for the shop base on the estimate. Tax
rate is 20% B. Calculate the operating cash flow for the repair
shop using the three methods given below Dollars in minus dollars
out Adjusted accounting profit Add back depreciation tax shield
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...
Owner of an auto repair shop hires Contractor to remodel his shop but does not mention...
Owner of an auto repair shop hires Contractor to remodel his
shop but does not mention that two days after the scheduled
completion date, Owner is to receive five small US Army personnel
carrier trucks for service, with a three-week deadline to finish
the job and turn the trucks over to the army. The contract between
Owner and the army has a liquidated damages clause calling for $300
a day for every day trucks are not operable after the deadline....
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
operating margin be inyear 2?2. Assume in the above that variable costs were 150 and fixed
costs were 200.What will revenues, variable costs and fixed costs be in year 2?
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...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- TASK back to top In the contemporary management environment, mergers and acquisitions are hot topics; particularly...
- A room with 2.7-m-high ceilings has a metal plate on the floor with V = 0V...
- which of the following statements are true? a) the same nuclear changes (creation/destruction of specific nucleons)...
- Overview: Advances in technology have impacted many facets of the auditing process, from assessing risk and...
- Background: This course is all about data visualization. However, we must first have some understanding about...
- A rescue helicopter lifts a 70.6-kg person straight up by means of a cable. The person...
- Dolomite, [CaMg(CO3)2] is found in a soil sample. A geochemist titrates 24.65 g of soil with...
ADVERTISEMENT