M Ch 9 & 10 NPV, IRR, Capita x Course Home Outlook C fi ezto.mheducation.com /hm

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M Ch 9 & 10 NPV, IRR, Capita x Course Home Outlook C fi ezto.mheducation.com /hm.tpx EEE App Bb Blackboard efax.com D E-Reserves (E-Res) fZ faxzero.com gotfreefax.com D MyUAlbany A Podium Net D UAlbany Mail Question 5 (of 5 10.00 points Fill in the missing numbers for the following income statement. (Input all amounts as positive values. Do not round intermediate calculations Sales 675.900 430,800 Costs 103,400 Depreciation EBIT Taxes (30% Net income Calculate the OCF OCF What is the depreciation tax shield? Depreciation tax shield References eBook & Resources Worksheet Difficulty: Basic Learning Objective: 10-01 How to determine the relevant cash flows for a proposed project. Check my work E Save & Ex Submit EN 12/3/2015

Explanation / Answer

EBIT = 675900-430800-103400 = 141700

Less:Tax (141700 *.30)                     (42510)

net income                                            99190

OCF =Net income +Depreciation

           = 99190 + 103400

           =$ 202590

Depreciation tax shield = 103400 * .30

                                      = $ 31020

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