A division of Hanes has the following data at the end of a year. Total revenue =
ID: 2431254 • Letter: A
Question
A division of Hanes has the following data at the end of a year.
Total revenue = $48 million
Depreciation = $8.2 million
Operating expenses = $28 million
For an effective federal tax rate of 35% and state tax rate of 6.5%, determine the
a.)CFAT-
choices are
1.)$21.37 million
2.)$15.37 million
3.)$25.37 million
4.)$10.37 million
B.)Total Taxes
Choices are.
1.)$4.629 million
2.)$4.459 million
3.)$4.539 million
4.)$4.729 million
C.)NPAT -
choices are
1.)$6.17 million
2.)$9.17million
3.)7.17 million
4.)8.17 milliom
Explanation / Answer
sales
48
operating expense (including depreciation)
36.2
operating profit
11.8
less federal tax -35%
4.13
profit after federal tax
7.67
less state tax = 6.5%
0.499
profit after tax
7.17
add depreciation
8.2
CFAT
15.37
CFAT
15.37
Total taxes
4.13+.5
4.63
NPAT
7.17
sales
48
operating expense (including depreciation)
36.2
operating profit
11.8
less federal tax -35%
4.13
profit after federal tax
7.67
less state tax = 6.5%
0.499
profit after tax
7.17
add depreciation
8.2
CFAT
15.37
CFAT
15.37
Total taxes
4.13+.5
4.63
NPAT
7.17
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