Fill in the missing numbers in the following income statement: (Do not round int

ID: 2780677 • Letter: F

Question

Fill in the missing numbers in the following income statement: (Do not round intermediate calculations and round your answers to the nearest whole number, e.g. 32.)

What is the OCF? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g. 32.)

OCF            $

What is the depreciation tax shield? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g. 32.)

Depreciation tax shield            $

Sales $ 644,600 Costs 346,100 Depreciation 96,800 EBIT $ Taxes (40%) Net income $

Explanation / Answer

Q1:

Particulars

Amount

Sales

$ 644,600

Less: Costs

$ 346,100

Less: Depreciation

$ 96,800

EBIT

$ 201,700

Less: Taxes (40%)

$ 80,680

Net income

$ 121,020

Q2:

Cash Flow From Operating Activities

= EBIT + Depreciation - Taxes +/- Change in Working Capital

=$201,700 +$96,800-$80,680 +0

= $ 217,820

Q 3:

Depreciation tax shield = Depreciation x tax rate

=$96,800 x 40%

= $ 38,720