The Rogers Coporation has a gross profit of $776,000 and $332,000 in depreciation expense. The Evans Corporation also has $776,000 in gross profit, with $45,500 in depreciation expense. Selling and administrative expense is $256,000 for each company. a. Given that the tax rate is 40 percent, compute the cash flow for both companies. b. Calculate the difference in cash flow between the two firms.
The Rogers Coporation has a gross profit of $776,000 and $332,000 in depreciation expense. The Evans Corporation also has $776,000 in gross profit, with $45,500 in depreciation expense. Selling and administrative expense is $256,000 for each company. a. Given that the tax rate is 40 percent, compute the cash flow for both companies. b. Calculate the difference in cash flow between the two firms.
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter6: Accounting For Financial Management
Section: Chapter Questions
Problem 10P: The Moore Corporation has operating income (EBIT) of 750,000. The companys depreciation expense is...
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The Rogers Coporation has a gross profit of $776,000 and $332,000 in
a. Given that the tax rate is 40 percent, compute the cash flow for both companies.
b. Calculate the difference in cash flow between the two firms.
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