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Showing posts with label Depreciation. Show all posts
Showing posts with label Depreciation. Show all posts
Wednesday, 9 July 2014

You are evaluating two different silicon wafer milling machines. The Techron I costs $222,000, has a three-year life, and has pretax operating costs of $57,000 per year. The Techron II costs $390,000, has a five-year life, and has pretax operating costs of $30,000 per year. For both milling machines, use straight-line depreciation to zero over the project’s life and assume a salvage value of $34,000. If your tax rate is 35 percent and your discount rate is 9 percent, compute the EAC for both machines.

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You are evaluating two different silicon wafer milling machines. The Techron I costs $222,000, has a three-year life, and has pretax op...

A proposed new investment has projected sales of $680,000. Variable costs are 65 percent of sales, and fixed costs are $157,000; depreciation is $58,000. Prepare a pro forma income statement assuming a tax rate of 34 percent. What is the projected net income? (Input all amounts as positive values.)

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A proposed new investment has projected sales of $680,000. Variable costs are 65 percent of sales, and fixed costs are $157,000; depreci...
Friday, 1 November 2013

Xavier Construction negotiates a lump-sum purchase of several assets from a company that is going out of business. The purchase is completed on January 1, 2011, at a total cash price of $820,000 for a building, land, land improvements, and four vehicles. The estimated market values of the assets are building, $481,950; land, $255,150; land improvements, $37,800; and four vehicles, $170,100. The company’s fiscal year ends on December 31. Required: 1.1 Prepare a table to allocate the lump-sum purchase price to the separate assets purchased.

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Xavier Construction negotiates a lump-sum purchase of several assets from a company that is going out of business. The purchase is compl...
Monday, 9 September 2013

Draiman, Inc., has sales of $604,000, costs of $254,000, depreciation expense of $61,500, interest expense of $28,500, and a tax rate of 35 percent. The firm paid out $45,500 in cash dividends. (Enter your answer as directed, but do not round intermediate calculations.) Required: What is the addition to retained earnings? Addition to retained earnings $ Explanation: The income statement starts with revenues and subtracts costs to arrive at EBIT. We then subtract out interest to get taxable income, and then subtract taxes to arrive at net income. Doing so, we get: Income statement Sales $ 604,000 Costs 254,000 Depreciation 61,500 EBIT $ 288,500 Interest 28,500 Taxable income $ 260,000 Taxes (35%) 91,000 Net income $ 169,000 The dividends paid plus the addition to retained earnings must equal net income, so: Net income = Dividends + Addition to retained earnings Addition to retained earnings = $169,000 – 45,500 Addition to retained earnings = $123,500

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Draiman, Inc., has sales of $604,000, costs of $254,000, depreciation expense of $61,500, interest expense of $28,500, and a tax rate of 3...

Draiman, Inc., has sales of $598,000, costs of $260,000, depreciation expense of $64,500, interest expense of $31,500, and a tax rate of 40 percent. The firm paid out $42,500 in cash dividends and has 53,000 shares of common stock outstanding. (Enter your answer as directed, but do not round intermediate calculations.) Requirement 1: What is the earnings per share figure? (Round your answer to 2 decimal places (e.g., 32.16).) Earnings per share $ Requirement 2: What is the dividends per share figure? (Round your answer to 2 decimal places (e.g., 32.16).) Dividends per share $ Explanation: The income statement starts with revenues and subtracts costs to arrive at EBIT. We then subtract out interest to get taxable income, and then subtract taxes to arrive at net income. Doing so, we get: Income statement Sales $ 598,000 Costs 260,000 Depreciation 64,500 EBIT $ 273,500 Interest 31,500 Taxable income $ 242,000 Taxes (40%) 96,800 Net income $ 145,200 Earnings per share is the net income divided by the shares outstanding, so: EPS = Net income / Shares outstanding EPS = $145,200 / 53,000 EPS = $2.74 per share And dividends per share are the total dividends paid divided by the shares outstanding, so: DPS = Dividends / Shares outstanding DPS = $42,500 / 53,000 DPS = $0.80 per share

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Draiman, Inc., has sales of $598,000, costs of $260,000, depreciation expense of $64,500, interest expense of $31,500, and a tax rate of 4...

During the year, Belyk Paving Co. had sales of $2,398,000. Cost of goods sold, administrative and selling

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During the year, Belyk Paving Co. had sales of $2,398,000. Cost of goods sold, administrative and selling expenses, and depreciation exp...

Graffiti Advertising, Inc., reported the following financial statements for the last two years.

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Graffiti Advertising, Inc., reported the following financial statements for the last two years. (Enter your answer as directed, but do not...