Question

In: Finance

In 2019, Alafaya had sales of $950,000 and paid taxes of $84,000. Because of the low...

In 2019, Alafaya had sales of $950,000 and paid taxes of $84,000. Because of the low interest rate environment, the firm also borrowed some money from the local bank and paid $40,000 in interest expense. In addition, the firm incurred Variable Costs and Fixed Costs of $270,000 and $400,000 respectively. If sales increase by 5%, what should be the increase in earnings per share?

Group of answer choices

14.17%

5.83%

5.0%

12.14%

8.17%

Solutions

Expert Solution

Correct answer: 14.17%

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Central City levies taxes of $950,000 in 2019. It collects $ 600,000 of this in 2019,...
Central City levies taxes of $950,000 in 2019. It collects $ 600,000 of this in 2019, $180,000 in February 2020, $120,000 in May 2020 and the remaining in February 2021. The fiscal year of the City ends on December 31. In 2019, the city will recognize tax revenues at the governmental activities level of: $600,000 $780,000 $900,000 $950,000
“Sales taxes are fairer than income taxes because sales taxes cannot be avoided by the rich.”...
“Sales taxes are fairer than income taxes because sales taxes cannot be avoided by the rich.” Discuss & evaluate this idea, using tax policy concepts to provide support for your evaluation. Is it possible to design a sales tax that is more progressive than a personal income tax? What would this tax structure look like?
(1) “Sales taxes are fairer than income taxes because sales taxes cannot be avoided by the...
(1) “Sales taxes are fairer than income taxes because sales taxes cannot be avoided by the rich.” Discuss & evaluate this idea, using tax policy concepts to provide support for your evaluation. Is it possible to design a sales tax that is more progressive than a personal income tax? What would this tax structure look like? (2) The two most important state taxes are income and general sales taxes, although states also make substantial use of excise taxes, direct business...
Sales taxes are fairer than income taxes because sales taxes cannot be avoided by the rich...
Sales taxes are fairer than income taxes because sales taxes cannot be avoided by the rich Discuss evaluate this idea , using tax policy concepts to provide support for your evaluation , Is it possible to design a sales tax that is more progressive than a personal income tax
1_ “Sales taxes are fairer than income taxes because sales taxes cannot be avoided by the...
1_ “Sales taxes are fairer than income taxes because sales taxes cannot be avoided by the rich.” Discuss & evaluate this idea, using tax policy concepts to provide support for your evaluation. Is it possible to design a sales tax that is more progressive than a personal income tax? What would this tax structure look like? “Sales taxes are fairer than income taxes because sales taxes cannot be avoided by the rich.” Discuss & evaluate this idea, using tax policy...
"Sales taxes are fairer than income taxes because sales taxes cannot be avoided by the rich."...
"Sales taxes are fairer than income taxes because sales taxes cannot be avoided by the rich." Evaluate this idea. Describe the evidence about the distribution of sales tax burdens among different income taxpayers. Would it be possible to design a sales tax that is more progressive than an income tax?
Because the income tax structure is progressive, the amount of taxes paid is a _____. a....
Because the income tax structure is progressive, the amount of taxes paid is a _____. a. smaller fraction of income in expansions than in contractions b. decreasing function of income in both expansions and contractions c. larger fraction of income in expansions than in contractions d. constant fraction of income throughout the business cycle e. constant amount at all levels of output and income
Because the income tax structure is progressive, the amount of taxes paid is a _____. a....
Because the income tax structure is progressive, the amount of taxes paid is a _____. a. ​ decreasing function of income in both expansions and contractions b. ​ constant fraction of income throughout the business cycle c. ​ constant amount at all levels of output and income d. ​ smaller fraction of income in expansions than in contractions e. ​ larger fraction of income in expansions than in contractions
Lone Star Sales & Service acquired a new machine that cost $84,000 in early 2019. The...
Lone Star Sales & Service acquired a new machine that cost $84,000 in early 2019. The machine is expected to have a five-year useful life and is estimated to have a salvage value of $14,000 at the end of its life. (Round your final answers to the nearest dollar.) (a.) Using the straight-line depreciation method, calculate the depreciation expense to be recognized in the second year of the machine's life and calculate the accumulated depreciation after the third year of...
   Calculate the vertical analysis of the following data. Income Statement 2018 2019 Sales $ 800,000 $950,000...
   Calculate the vertical analysis of the following data. Income Statement 2018 2019 Sales $ 800,000 $950,000 Cost of Goods Sold 350,000 600,000 Gross Margin 450,000 350,000 Operating Expenses 250,000 280,000 Net Income $200,000 $ 70,000 From the following Balance sheet of A Co. Ltd., you are required to prepare a Schedule of Changes in Working Capital Liabilities 2011 2012 Assets 2011 2012 Share Capital 200000 210000 Cash at bank 105000 106000 Profit & loss A/c 20000 23000 Debtors 18000 28000...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT