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You have studied the theory and want to put what you have learnt into practice.
iii. Paulo Jr. wonders why the profit after tax is not the same as the cash flows from operating activities. Explain to Paulo Jr. two reasons why these two numbers are usually different and provide an example for each difference?
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- The after tax cash flow requires more computation than the before tax cash flow evaluation? True FalseREQUIRED: ANSWER THE FOLLOWING QUESTIONS IN POINT FORM • What is the difference between book value and market value? Which should we use for decision making purposes? • What is the difference between accounting income and cash flow? • What is the difference between average and marginal tax rates? • How do we determine a firm’s cash flows? • What is CCA? How is it calculated?I need the Operating Cash flows and this after tax does not come as correct on my hoemwork
- Of the following, the most likely effect of an increase in income tax rates would be to: A) Decrease the savings rate B) Decrease the supply of loanable funds C) Increase interest rates a. All statements are correct. b. Only one statement is correct. c. Only one statement is incorrect.Using your own words, briefly (hopefully) explain: (a). What is "retained earning"? How does after-tax cash flows differ, when purchasing with retained earning vs. with loan?A fellow student studying managerial accounting says. The net present value (NPV) weighs early receipts of cash much more heavily than more distant receipts of cash. Do you agree or disagree? Why?
- Contrast the modern construct for FISIM with a measure that sub- tracts deposits from the financial sector’s lending to measure value added in the financial sector, i.e. what we called gross profits. How will these two measures differ in terms of size and sensitivity to risk? Can you give differing views of a world without finance for each to be the proper measure of value added? [Note these are two different statistics which are designed to measure the same number so if they differ at least one of is incorrect.]Under the principle of cashflow estimation, why it is important that cashflow should be measured on after-tax basis?1. What is opportunity cost and why is it an important concept in the capital budgeting process? The opportunity cost concept applies to almost every financial decision we make as individuals. Can you give an example from your own experience? 2. What is capital rationing from the perspective of capital budgeting? 3. Give an example of a strength and a weakness of the accounting rate of return approach.
- The ideal taxation system is a good tax system, that is, it must complygovernment needs whose spending is increasing over time, which can encouragesociety to achieve the optimal allocation of resources, which can lead to their achievementequitable distribution of income and wealth and enables the implementation of economic stability.The ideal taxation is taxation that can direct the utilization of economic surplus forachieve optimal and dynamic use of economic resources.Please explain what kind of tax is the best and can be used assource of government revenue or financing in carrying out its tasks to achieveand improve people's welfare!After-Tax Cash Flows For each of the following independent situations, compute the net after-tax cash flow amount by subtracting cash outlays for operating expenses and income taxes from cash revenue. The cash outlay for income taxes is determined by applying the income tax rate to the cash revenue received less the cash and noncash (depreciation) expenses. Do not use negative signs with any of your answers below.Of the following, the most likely effect of an increase in income tax rates would be to: decrease the savings rate? decrease the supply of loanable funds? increase interest rates ? all of the choices are correct