Standard Deviation and Cash Flow
1. Cash flow (LO2) Assume a corporation has earnings before depreciation and taxes of $100,000, depreciation of $50,000, and that it has a 30 percent tax bracket. Compute its cash flow using the format below.
Earnings before depreciation and taxes _____ Depreciation _____ Earnings before taxes _____ Taxes @ 30% _____ Earnings after taxes _____ Depreciation _____
121. Solution:
Earnings before depreciation and taxes $100,000 Depreciation – 50,000 Earnings before taxes 50,000 Taxes @ 30% 15,000 Earnings after taxes 35,000 Depreciation + …show more content…
Payback for Product X Payback for Product Y
$200,000 – 60,000 1 year $200,000 – 40,000 1 Year 140,000 – 90,000 2 years 160,000 – 70,000 2 years 50,000 – 50,000 3 years 90,000 – 80,000 3 years 10,000/20,000 .5 years
Payback Product X = 3.00 years
Payback Product Y =3.50 years
Product X would be selected because of the faster payback.
7. Payback method (LO3) Assume a $50,000 investment and the following cash flows for two alternatives.
Year Investment A Investment B 
1 $10,000 $20,000 
2 11,000 25,000 
3 13,000 15,000 
4 16,000 — 
5 30,000 — 
Which alternative would you select under the payback method?
127. Solution:
Payback for Investment A Payback for Investment B
$50,000 –$10,000 1 year $50,000 – $20,000 1 year 40,000 – 11,000 2 years 30,000 – 25,000 2 years 29,000 –

Cash Flow
912 Words  4 PagesASSIGNMENT #2 Application of Cash flow formulae [problems 15], Depreciation [problems 68] and Breakeven Analysis [problems 910] Total Marks: 100 Problem #1 [5] What amount would you need to pay each January 1 into a savings account if at the end of 15 years (15 payments) you desire RM 30,000? Annual interest is 7%. (Note: The last payment will coincide with the time of RM RM 30,000 balance.) Problem #2 [5] A future amount, F, is equivalent to $1,500 now when six years separate the…

Standard Deviation
1170 Words  5 PagesDeviation Definition: Behavior commonly seen in children that is the result of some obstacle to normal development such behavior may be commonly understand as negative (a timid child, a destructive child) or positive (a quite child), both positive and negative deviation will disappear once the child begins to concentrate on a piece of work freely chosen by him. The physical deforms are easier to identify. This can be by birth due to an accident etc… and most such physical deforms…

The Cash Flow Of The Free Cash Flows ( Fcf )
1609 Words  7 Pagescompany we first started by calculating the free cash flows (FCF) year by year. In order to do so, we decided to use the forecasted revenue numbers from Capital IQ and calculate all the other metrics by using the trends we saw in last three years (Exhibit 3). The company can allocate free cash flow in several ways, including but not limited to: repurchasing stock, reinvesting for growth and paying out dividends. After calculating the free cash flows, we had to calculate the terminal value of the company…

Cash Flows
654 Words  3 Pages1. Cash flows are important, in simple terms, because cash is what is used to pay for things. Cash flow analysis removes noncash flow items from the income statement (such as depreciation) and this allows management to understand better the actual business conditions. There are many instances where the net profit fluctuates, but the cash flow from operations does not. That the net profit is subject to variance from noncash items, including from writedowns, highlights the importance of adding cash…

Standard Deviation
1154 Words  5 PagesI 'll be honest. Standard deviation is a more difficult concept than the others we 've covered. And unless you are writing for a specialized, professional audience, you 'll probably never use the words "standard deviation" in a story. But that doesn 't mean you should ignore this concept. The standard deviation is kind of the "mean of the mean," and often can help you find the story behind the data. To understand this concept, it can help to learn about what statisticians call normal distribution…

Cash Flows
1166 Words  5 PagesI. For each of the years on the Statement of Cash Flows: Major sources of cash in 1990 were investing activities, Major Sources of cash in 1989 were financing activities 1. What were the firm 's major sources of cash? Its Major sources of cash were provided by operating major uses of cash? activities. ( Cash provided by investing activities in 1991 followed by operating activities. Major uses of cash (operating activities also were sources of cash), while was much less than operating activities…

Cash Flows
968 Words  4 PagesCash Flows Aleshia Wisch ACC206: Principles of Accounting II Prof. Eric Sumners August 11, 2014 ACC 206 Week Assignment 1. Critical Thinking Question: Answer the following questions: Why are noncash transactions, such as the exchange of common stock for a building for example, included on a statement of cash flows? How are these noncash transactions disclosed? It is important for a company to show what assets they have on hand that can convert to cash. Non cash transactions…

Cash Flow
2481 Words  10 Pagesmeet financial obligations as they become current. The current ratio, defined as current assets divided by current liabilities, Current assets/Current liabilities assumes that current assets are much more readily and certainly convertible into cash than other assets. It relates these fairly liquid assets to the claims that are due within one year — the current liabilities. 1. Magnetronics held $17,620 of current assets at yearend 1999 and owed $7,531 to creditors due to be paid within…

Cash Flow
7360 Words  30 PagesStatement of Cash Flows Learning Objectives 1. Identify the purposes of the statement of cash flows 2. Classify activities affecting cash as operating, investing, or financing activities 3. Compute and interpret cash flows from financing activities 4. Compute and interpret cash flows from investing activities 5. Use the direct method to calculate cash flows from operations 6. Use the indirect method to explain the difference between net income and net cash provided…

Cash Flow
2474 Words  10 Pagesto meet financial obligations as they become current. The current ratio, defined as current assets divided by current liabilities, Current assets/Current liabilities assumes that current assets are much more readily and certainly convertible into cash than other assets. It relates these fairly liquid assets to the claims that are due within one year — the current liabilities. 1. Magnetronics held $17,620 of current assets at yearend 1999 and owed $7,531 to creditors due to be paid within one…
More about Standard Deviation and Cash Flow

Cash Flow
912 Words  4 Pages 
Standard Deviation
1170 Words  5 Pages 
The Cash Flow Of The Free Cash Flows ( Fcf )
1609 Words  7 Pages 
Cash Flows
654 Words  3 Pages 
Standard Deviation
1154 Words  5 Pages 
Cash Flows
1166 Words  5 Pages 
Cash Flows
968 Words  4 Pages 
Cash Flow
2481 Words  10 Pages 
Cash Flow
7360 Words  30 Pages 
Cash Flow
2474 Words  10 Pages