Jacobi Inc.recently reported the company made significant upgrades resulting in expenditures on fixed assets and net...

Jacobi Inc.recently reported the company made significant upgrades resulting in expenditures on fixed assets and net operating working capital totaled $1.2 Million. If Jacobi has sales of $4.50 million, variable cost of 40% of sales, depreciation of 1.2 Million and had a tax rate of 30%. How much was its free cash flow, in Millions?

Expert Solution

Particulars	$ in millions
Sales	4.50
Less: Variable costs	1.80
Earnings before depreciation and tax	2.70
Depreciation	1.20
Earnings before tax	1.50
Tax at 30%	0.45
Earnings after tax	1.05
Add back Depreciation *	1.20
Free cash flow	2.25

Therefore, Free cash flow is $2.25 million.

* We add back depreciation because it is a non cash expense but tax deductible.

Excel formula:

jeff jeffy answered 1 year ago

Net capital spending is equal to: ending net fixed assets minus beginning net fixed assets plus...

Net capital spending is equal to: ending net fixed assets minus beginning net fixed assets plus depreciation. ending total assets minus beginning total assets plus depreciation. ending net fixed assets minus beginning net fixed assets minus depreciation. beginning net fixed assets minus ending net fixed assets plus depreciation.

Teddy's Mattress had beginning net fixed assets of $812 and ending net fixed assets of $1,243. Depreciation was $79

Teddy's Mattress had beginning net fixed assets of $812 and ending net fixed assets of $1,243. Depreciation was $79. What is the amount of net capital spending? Group of answer choices$352$740-$352$510

The following expenditures relating to plant assets were made by Prather Company during the first 2 months of 2017.

The following expenditures relating to plant assets were made by Prather Company during the first 2 months of 2017. 1. Paid $5,000 of accrued taxes at time plant site was acquired. 2. Paid $200 insurance to cover possible accident loss on new factory machinery while the machinery was in transit. 3. Paid $850 sales taxes on new delivery truck. 4. Paid $17,500 for parking lots and driveways on new plant site. 5. Paid $250 to have company name and advertising...

For 20Y3, Greyhound Technology Company reported its most significant decline in net income in years. At...

For 20Y3, Greyhound Technology Company reported its most significant decline in net income in years. At the end of the year, Duane Vogel, the president, is presented with the following condensed comparative income statement: GREYHOUND TECHNOLOGY COMPANY Comparative Income Statement For the Years Ended December 31, 20Y3 and 20Y2 20Y3 20Y2 Sales $ 862,000 $ 785,000 Cost of goods sold (650,000) (500,000) Gross profit $ 212,000 $ 285,000 Selling expenses $ (44,000) $ (40,000) Administrative expenses (27,000) (25,000) Total operating...

PLEASE USE EXCEL Jackson Park Company has current assets of $32,450, net fixed assets of $72,340,...

PLEASE USE EXCEL Jackson Park Company has current assets of $32,450, net fixed assets of $72,340, current liabilities of $17,842, and long-term debt of $53,200. a. Prepare the Balance Sheet for the company and answer the following: b. What is the value of shareholder’s equity account for the firm? c. How much is net working capital?

A project will require $450,000 for fixed assets and $58,000 for net working capital. The fixed...

A project will require $450,000 for fixed assets and $58,000 for net working capital. The fixed assets will be depreciated straight-line to a zero book value over the five-year life of the project. At the end of the project, the fixed assets will be worthless. The net working capital returns to its original level at the end of the project. The project is expected to generate annual sales of $875,000 and costs of $640,000. The tax rate is 20 percent...

For 20Y2, Macklin Inc. reported a significant decrease in net income. At the end of the...

For 20Y2, Macklin Inc. reported a significant decrease in net income. At the end of the year, John Mayer, the president, is presented with the following condensed comparative income statement: Macklin Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales $841,340 $750,000 Cost of goods sold (592,200) (470,000) Gross profit $249,140 $280,000 Selling expenses $(83,480) $(63,000) Administrative expenses (49,360) (40,000) Total operating expenses $(132,840) $(103,000) Operating income $116,300 $177,000 Other revenue 4,109 3,200...

1. A company has $1,301 in inventory, $4,728 in net fixed assets, $598 in accounts receivable,...

1. A company has $1,301 in inventory, $4,728 in net fixed assets, $598 in accounts receivable, $254 in cash, $538 in accounts payable, and $5,323 in equity. What is the company's long-term debt? 2. You find the following financial information about a company: net working capital = $1,113; fixed assets = $6,281; total assets = $8,638; and long-term debt = $4,645. What are the company's total liabilities? 14. (3) The tax rates are as shown below: Taxable Income Tax Rate...

A company had net fixed assets of $7 million on December 31, 2018 and $10 million...

A company had net fixed assets of $7 million on December 31, 2018 and $10 million on December 31, 2019. For 2019, the company’s depreciation expense was $1 million and its cash flow from operations was $7 million. During 2019, the company’s net working capital increased by $500,000 and net capital spending was $4 million. What was the firm’s cash flow from assets?

There are two parts to this problem a) & b) A company made the following expenditures...

There are two parts to this problem a) & b) A company made the following expenditures in connection with the construction of a new building: Architect’s fees $12,000 Cash paid for land and unusable building on the land 300,000 Removal of old building 18,000 Salvage from sale of old building materials -4,000 Construction survey 1,500 Legal fees for title search 3,000 Excavation for basement construction 25,000 Machinery purchased for operations 100,000 Freight on machinery purchased 1,600 Construction costs of new...

Question