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Calculating free cash flows Spartan Stores
Calculating free cash flows Spartan Stores is expanding operations with the introduction of a new distribution center. Not only will sales increase, but investment in inventory will decline due to increased efficiencies in getting inventory to showrooms. As a result of this new distribution center, Spartan expects a change in EBIT of $900,000. While inventory is expected to drop from $90,000 to $70,000, accounts receivables are expected to climb as a result of increased credit sales from $80,000 to $110,000. In addition, accounts payable are expected to increase from $65,000 to $80,000. This project will also produce $300,000 of depreciation per year and Spartan Stores is in the 34 percent marginal tax rate. What is the projects free cash flow in year 1?
A clothing manufacturing corporation donates last year’s inventory to the Red Cross for use in its disaster relief efforts. The clothes have a fair market value of $200,000 and a basis to the corporation of $75,000. What is its charitable contrib..
When a company uses the LIFO inventory costing method, the unit costs used to compute cost of goods sold and ending inventory are determined by the unit costs of which inventory purchases?
higher than the net operating income under variable costing-lower than the net operating income under variable costing.
Flop Company manufactures 10,000 units of widgets for use in its annual production. Costs are direct materials $20,000, direct labor $55,000, variable overhead $45,000, and fixed overhead $70,000. Floozy Company has offered to sell Flop 10,000 units ..
Wisconsin Warning Co. issued $5,000,000 of five-year, 8 % bonds with interest payable semi-annually at an effective interest rate of 11 %. Use the tables in Appendix A to determine the present value of the bonds payable. Using the information from th..
Iverycoast Inc. purchased a van on January 1, 2015, for $800,000. Estimated life of the van was 5 years, and its estimated residual value was $90,000. Iverycoast uses the straight-line method of depreciation. Calculate the book value of the van at th..
Stockholders' equity totaled $82,000 at the beginning of the year. During the year, net income was $12,000, dividends of $3,000 were declared and paid, and $10,000 of common stock was issued at par value.
When did you earn your revenue for both parties? What caused you to earn the revenue? Did you earn the revenue at the moment you received cash?
Dec. 20 Reinstated the account of Dr. Pete Baker that had been written off on September 7 and received $8,400 cash in full payment.
Evaluate O'Brien Vineyards margin of safety percentage? Determine O'Brien Vineyards degree of operating leverage?
Determine the net credit and collection expense in dollars and as a percentage of sales after considering the revenue not earned from other investment opportunities.
(Closing Entries for a Corporation) Presented below are selected account balances for Kirby Co. as of December 31, 2014. Prepare closing entries for Kirby Co. on December 31, 2014.
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