Expenses=$75,000; depreciation=$25,000; tax rate=35%; ATCF=93,250. The gross inc

Question

Expenses=$75,000; depreciation=$25,000; tax rate=35%; ATCF=93,250. The gross income is closest to..

I'm getting 245,384.61 but the answer is 205,000

e) $425,000 $148,750 $312.400 h) $140,403 i) $320,747 i) 5305,747 312400 6. Expenses» $75,000, depreciation-$25,000, tax rate-35%; ATCF-S93.250 The urminsemejs closest to a) Not enough information to decide b) $85,000 c) $100,000 d) $101,200 e) $102,590 f) $107,800 g) $15,900 h) $145,700 ) S155,000 j) $172,250 k) $177,300 ) $188,450 m) $192,100 n) S197,700 o) $199.000 p) $200,000 r) $202,200 s) S205,000 1) $207,000 u) $209,500 v) $211,500 w) $212,000 x) $2 17,750 y) $219,900 z) $225,500 b 25D

Explanation / Answer

ANSWER: You have to subtract the depreciation from atcf in order to get the btcf.

ATCF = $93,250

tax rate = 35%

depreciation = $25,000

expenses = $75,000

btcf = (atcf - depreciation) * ( 1 - tax rate)

btcf = (93,250 - 25,000) * ( 1 - 35%)

btcf = 68,250 * 65%

btcf = $105,000

gross income = btcf + expenses + depreciation

groos income = $105,000 + $75,000 + $25,000 = $205,000

hence the gross income is $205,000.

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