The owner of a bicycle repair shop forecasts revenues of $176,000 a year. Variable costs will be $54,000, and rental costs for the shop are $34,000 a year. Depreciation on the repair tools will be $14,000. Prepare an income statement for the shop based on these estimates. The tax rate is 40%.   NOTE: I know this is a simple one (Revenue - Expenses = Pretax profit - Taxes = Net Income). It’s just asking for income statement entries. However, for some reason I currently can’t figure out, a supposedly simple calculation is being marked as incorrect.  I just need somebody else to take a look at this. Please help. Thanks!

Q: A company with $630,000 in operating assets is considering the purchase of a machine that costs…

A: If cash flows are uneven,then  Payback period(PBP)=Years before full recovery+ (uncovered cost at…

Q: A company is considering purchasing a new piece of machinery at a cost $50,000. It is expected to…

A: Economic Value Added Economic value added is referred to as the economic profit which is calculated…

Q: Johnny’s Lunches is considering purchasing a new, energy-efficient grill. The grill will cost…

A: Given that, Cost of grill = $35000 Depreciation = Straight line basis over 3 years Sale value after…

Q: Assume everything is given in n=0, CONSTANT dollars unless otherwise stated: Hartsfield Company is…

A: IRR:- IRR stands for Internal Rate of return. IRR is the rate that measures the profitability for…

Q: Johnny’s Lunches is considering purchasing a new, energy-efficient grill. The grill will cost…

A: The capital budgeting is a technique that helps to analyze the profitability of the project.

Q: Hammer Corporation wants to purchase a new machine for $303,000. Management predicts that the…

A: Accounting (book) rate of return (ARR)ARR is useful to calculate investment profitability quickly.…

Q: Lou Lewis, the president of Lewisville Company has asked you to give him an analysis of the best use…

A: Net Present Value - An investment proposal's net present value can be calculated by adding up all of…

Q: , calculate the net investment for the new line.

A: Information Provided: Existing line cost = $600,000 Existing line book value = $200,000 Salvage…

Q: The owner of a bicycle repair shop forecasts revenues of $228,000 a year. Variable costs will be…

A: Income Statement: A financial statement that shows the profitability of the business in the given…

Q: If the depreciation rates are 12% in Year 1 and 18% in Year 2, what is the depreciation tax shield…

A: Depreciation expense: Depreciation expense is the reduction in a particular asset due to its use or…

Q: Johnny’s Lunches is considering purchasing a new, energy-efficient grill. The grill will cost…

A: Operating cash flow :- Operating cash flow (OCF) is a proportion of the measure of money produced by…

Q: Your firm is contemplating the purchase of a new $575,000 computer-based order entry system. The…

A: Internal Rate of Return or IRR is used in deciding range of discount rates or WACC up to which…

Q: Johnny’s Lunches is considering purchasing a new, energy-efficient grill. The grill will cost…

A: Data given: Cost = $47,000 Savings on account of purchase = $23,500 Tax rate = 30%   Working:…

Q: How will the tax authority’s decision affect the after-tax cost of the kiln? The tax rate is 25%,…

A: Tax shield if installation cost is currently expensed = tax*installation cost = 25%*55,000 = 13.74…

Q: A developer is deciding whether to purchase some heavy-duty landscaping equipment. The alternative…

A: Computation:

Q: A small commercial building contractor purchased a used crane 2 years ago for $60,000. Its operating…

A: Commerical building expenses = 60000 Operation cost = 2500 for one month and then increases by 50…

Q: The owner of a bicycle repair shop forecasts revenues of $216000 a year. Variable costs will be…

A: Income statement: It refers to a financial statement that presents all the income earned by the…

Q: Fort requires equipment costing $320,000.  It is a  9-year project, and is depreciated straight line…

A: cost of equipment= $320,000 life span of the project= 9 years  Sales generated= $189,000  cost=…

Q: The owner of a bicycle repair shop forecasts revenues of $168,000 a year. Variable costs will be…

A: The income statement is one of the financial statements that record the company’s income, expenses,…

Q: The owner of a bicycle repair shop forecasts revenues of $180,000 a year. Variable costs will be…

A: The income statement helps to identify the revenues, costs, and profits of a firm. The operating…

Q: b) Magen's Bakery, Inc., is considering the purchase of a new cake mixing equipment for $200,000.…

A: Net working capital Net working capital is required to run the business. It is calculated as shown…

Q: Company is considering purchasing a breadmaker. The cost of the breadmaker is $200,000 and an…

A: To Find: NPV

Q: Benton is a rental car company that is trying to determine whether to add 25 cars to its fleet. The…

A: The annual cash flow generated from the purchase of the car is depicted in the following table. The…

Q: Your firm is contemplating the purchase of a new $575,000 computer-based order entry system. The…

A: Savings before tax = $ 176,000 Purchase Price = $ 575,000 Tax Rate = 23% Salvage Value = $60,000…

Q: Your firm is contemplating the purchase of a new $605,000 computer-based order entry system. The…

A: Internal Rate of Return : It show the how much on investment amount project will return and it also…

Q: What is the internal rate of return on this investment?

A: Rate of return of a company implies the amount of money that is being returned after investing in an…

Q: Crane Corp. management is considering purchasing a machine that will cost $117,250 and will be…

A: Working Note #1 Calculation of depreciation: Cost of machine = $117,250 Useful life = 5 years…

Q: A drug store is looking into the possibility of installing a “24/7” automated prescription refill…

A: Discounting is a technique through which PV of future amount is computed by consider appropriate…

Q: avlovich​ Instruments, Inc., a maker of precision​ telescopes, expects to report pretax income of…

A:

Q: With a $100,000 investment in a new injection moulding machine, A-Design Inc., a company specialized…

A: The payback period is the span of time necessary to repay the cost of an investment. Simply…

Q: The owner of a bicycle repair shop forecasts revenues of $216000 a year. Variable costs will be…

A: Here, Sales Revenue is $216,000 Variable Cost is $64,000 Rent is $44,000 Depreciation is $24,000 Tax…

Q: A drug store is looking into the possibility of installing a “24/7” automated prescription refill…

A: Given:   Projected increase in revenues 20000 Expected annual costs 5000 Depreciation Method…

Q: The owner of a bicycle repair shop forecasts revenues of $160,000 a year. Variable costs will be…

A: Income statement is one of financial statement used by stakeholders to analyse the profitability of…

Q: A company with $795,000 in operating assets is considering the purchase of a machine that costs…

A: Payback period = Machine initial cost/Annual reduction in cost

Q: A drug store is looking into the possibility of installing a "24/7" automated prescription refill…

A: To grow, firm starts various new projects. Firm can do the business at least situation of not loss…

Q: The owner of a bicycle repair shop forecasts revenues of $200,000 a year. Variable costs will be…

A: revenue = 2,00,000 variable cost = 60,000 rental cost = 40,000 depreciation = 20,000 tax rate = 20%…

Q: As the director of a construction firm, you are considering buying a new cement mixing truck for…

A: Particulars Year 1 Year 2 Year 3 Year 4 Year 5 Operating cost $2,300 $2,300 $2,300 $2,300 $2,300…

Q: Your company is considering a purchase of a $580,000 computer-based order entry system. The system…

A: Calculating the of the depreciation expenses for the equipment. We have,Depreciation expenses =…

Q: Laurel’s Lawn Care Ltd., has a new mower line that can generate revenues of $135,000 per year.…

A: Given revenues =135,000 per year Direct production costs =$45,000 fixed costs =$17,500 a year…

Q: The tax rate is 20% Calculate the operating cash flow for the repair shop using the three methods…

A: Operating Cash Flow: It is the amount of cash generated by the firm from its normal business…

Q: A machine costs £16,000 and has a 5-year life. The required rate of return is 10%. By how much can…

A: Depreciation= 30%* Opening value

Q: Johnny’s Lunches is considering purchasing a new, energy-efficient grill. The grill will cost…

A: Computation of the operating cash flows in each year are shown as below: Formula sheet is annexed…