You manufactured 1,050 bikes and sold 1,000 of them for $200 each. Labor is 90/bike, material 60/bike. Rent is 15,000. No debt, hence no interest cost. Profits tax is 20%. What are (after-tax) profits? Calculate cash in and cash out. Assume all profits are paid to owners. What is net change in cash? Your starting balance sheet contained $100,000 in fixed assets and $30,000 in cash. Owners’ equity was the full 130,000. What does your new balance sheet look like?

You manufactured 1,050 bikes and sold 1,000 of them for $200 each. Labor is 90/bike, material 60/bike. Rent is 15,000. No debt, hence no interest cost. Profits tax is 20%. What are (after-tax) profits? Calculate cash in and cash out. Assume all profits are paid to owners. What is net change in cash? Your starting balance sheet contained $100,000 in fixed assets and $30,000 in cash. Owners’ equity was the full 130,000. What does your new balance sheet look like?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 16E

See similar textbooks

Similar questions

The initial purchase price of a new stamp press is $6,000. The firm will spend $5,000 on shipping and installation. Training of new employees will cost $2,000. As a result of the purchase, inventory must increase $1,300. What is the net initial cash flow? Round your answer to the nearest dollar. Tax rate is 40%. Sign your cash flows negative for outflows and positive for inflows.
The company's revenue is 100 000 rubles. The cost of materials, raw materials is 35 000 rubles, the cost of fuel and energy consumption is 10 000 rubles. The wages of employees are 25 000 rubles. Having a specialist diploma, an entrepreneur could receive a wage as an employee in another company in the amount of 5000 rubles, while he could put the available money (200 000) into the bank at an annual interest rate of 10%. Calculate the accounting and economic profit of this firm.
A machine could be purchased for £800,000; it would be used for 3 years and then sold for £580,000. It would qualify for capital allowances at 18% reducing balance basis with a balancing allowance or charge on disposal. The company pays tax at 20% and has a cost of capital of 10%. What is the tax cash flow at time 3, to the nearest £100? A £8,400 inflow B £8,400 outflow C £19,365 inflow D £19,365 outflow
The owner of a bicycle repair shop forecasts revenues of $196,000 a year. Variable costs will be $59.000, and rental costs for the shop are $39.000 a year. Depreciation on the repair tools will be $19.000. a. Prepare an income statement for the shop based on these estimates. The tax rate is 20% Calculate the operating cash flow for the repair shop using the three methods given below Now calculate the operating cash flow 1. Dollars in minus dollars out 2. Adjusted accounting profits, in 3.Add back depreciation tax shield
The owner of a bicycle repair shop forecasts revenues of $240,000 a year. Variable costs will be $70,000, and rental costs for the shop are $50,000 a year. Depreciation on the repair tools will be $30,000. Prepare an income statement for the shop based on these estimates. The tax rate is 20%. Calculate the operating cash flow for the repair shop using the three methods given below: Dollars in minus dollars out. Adjusted accounting profits. Add back depreciation tax shield.
You are purchasing an equipment for $ 200,000 for your new store. Assume the store has no other expenses or revenues other than those associated with this project. You are going to purchase an additional $ 12,500 of inventory for production with the new equipment and set up a cash account with a $ 2,000 balance. The inventory purchase will result in an account payable of $ 4,500. The firm's tax rate is 20%. What is the net cash flow at time zero?
Suppose you sell 8,000 of the 3 pack of lenses described in question 3 above in one year. You cost on each 3 pack is $29.95 and you sell them for $59.95. If your operating expenses for the year total $144,080, what are your Net Income and Net Profit Margin Percentage?
The owner of a bicycle repair shop forecasts revenues of $200,000 a year. Variable costs will be $60,000, and rental costs for the shop are $40,000 a year. Depreciation on the repair tools will be $20,000. a. Prepare an income statement for the shop based on these estimates. The tax rate is 20%. b. Calculate the operating cash flow for the repair shop using the three methods given below: Now calculate the operating cash flow. Dollars in minus dollars out. Adjusted accounting profits. Add back depreciation tax shield.
The owner of a bicycle repair shop forecasts revenues of $216000 a year. Variable costs will be $64,000 and rental costs for the shop are $44000 a year. Depreciation on the repair tools will be $24000 1. Prepare an income statement for the shop based on these estimates. The tax rate is 20% Calculate the operating cash flow for the repair shop using the 3 methods given below. Now calculate the operating cash flow 1. Dollars in Minus Dollars out 2. Adjusted accounting profit 3. After-tax operating cash flow
Your firm sells widgets for $10 each. You make a gross profit of $3 on each widget. You have $300,000 of operating costs. Your company is exactly at break-even. What is the dollar amount of your cost of goods sold? Your firm has a gross profit of 15%. Your firm has operating costs of $75,000 per month. How much monthly revenue do you need to break-even?
Suppose you have a company that produces and sells shoes: The cost of producing 6,000 pairs of shoes is $81,500 and 16,000 pairs of shoes for $165,000. each pair produced can be sold for $21; There is a website where your shoes can be viewed. The traffic on the website is a variable amount, and each view generates $0.005; The employees are paid 15% of the profit function; The director wants monthly deposits to save $5,000,000 at 5.10% in 30 years; and Additional money is saved for your position for only the first month. You want to make $250,000 at 5.70% compounded continuously for 20 years.Leading Question: How would you represent the above situation? Suppose in the first month, you sold 10,000 pairs of shoes and half a million views on the website. What is the first month's outcome? How does the second month's model differ from the first month?
You run a chain of clothing stores that sells sports apparel including Andy Reid hoodies. This quarter, you buy 1,000,000 hoodies at a price of $30.00 each. For the next two quarters, you sell 500, 000 hoodies each quarter for $60.00 each. The combined corporate tax rate is 30%. Find cash flows for all three quarters.