Cape Cod Cranberry Products is evaluating the introduction of a new line of juice drinks consisting of cranberry juice blended with sweeter juices such as apple or grape
In the first year the product line is introduced, sales are forecasted at $2,000,000, Cost of Goods Sold at $1,200,000, other cash expenses at $300,000, depreciation expense at $800,000. The company has many other profitable product lines. It's marginal tax rate is 35%. Compute operating cash flow for the first year.
Answer:
Sales $2,000,000
Cost of Goods Sold (1,200,000)
Gross Profit $800,000
Other Cash Exp. (300,000)
Depreciation (800,000)
Net Operating Income (300,000)
Taxes 35% (105,000)
NOPAT (loss) (195,000)
Depreciation (800,000)
Operating Cash Flow $605,000
You might also like to view...
What are three of the five main ways that motivation plays a role in an organization?
a. it protects against groupthink by making independent workers b. it helps good people remain in the organization c. it helps employees go beyond the call of duty d. it keeps workers engaged and producing quality work e. it guarantees employee retention
When a non-occupying investor and an owner-occupant pool their resources to buy a home is is called:
a. equity ownership b. equity occupancy c. equity sharing d. equity investing