Purchase Solution

Depreciation and Cash flow

Not what you're looking for?

Ask Custom Question

Howell Magnetic`s Corporation is going to purchase an asset for $400,000 that will produce $180,000 per year for the next four years in earnings before depreciation and taxes.. The asset will be depreciated using the three-year MACRS depreciation schedule. (This represents four years of depreciation based on the half-year convention.) The firm is in a 34 percent tax bracket. Fill in the scheduled before for the next four years. (You need to first determine annual depreciation)

Earnings before depreciation $ __________
Less: Depreciation    $ __________
Earnings before taxes   $ __________
Less: Tax (34%) $ __________
Earnings after taxes $ __________
Add: Depreciation    $ __________
After-tax cash flows $ __________

Purchase this Solution
Solution Summary

Depreciation and cash flows for Howell Magnetic`s Corporation are examined. Accounting over four years is examined.

Purchase this Solution
Free BrainMass Quizzes
MS Word 2010-Tricky Features

These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.

Operations Management

This quiz tests a student's knowledge about Operations Management

Introduction to Finance

This quiz test introductory finance topics.

Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

IPOs

This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)

View More Free Quizzes
Related BrainMass Solutions

  • Cash Flow Calculations

    119482 Calculating Cash Flow and Depreciation: Example Problem Assume a firm has earnings before depreciation and taxes of $500,000 and no depreciation. It is in a 40 percent tax bracket. A. Compute its cash flow B.

  • Fair Weather Friend Corporation

    75,000 - 66,000 = 9,000 This solution is comprised of a detailed explanation to compute its cash flow, and answer how much would cash flow be if there were only $10,000 in depreciation and how much cash flow is lost due to the reduced depreciation between

  • The Menendez Corporation

    0 Add: Depreciation Expense 3,000,000 Net cash flow 3,000,000 The net income will be 0, and the net cash flow will increase to $3,000,000.

  • Define cash flow

    411999 Define cash flow Cash flow can be said to equal: a.income before depreciation and taxes minus taxes b. income before depreciation and taxes plus taxes c. income before depreciation and taxes plus depreciation d. income after taxes minus

  • Prefer that congress increase or decrease the depreciation?

    Cash flow worse because of higher taxes paid From a cash flow point of view, having higher depreciation early in the asset's life helps because high depreciation reduces taxable income and thus tax payments.

  • Computation of Cash Flow of Corporate Earnings

    216485 Computation of Cash Flow of Corporate Earnings Assume a corporation has earnings before depreciation and taxes of $90,000, depreciation of $40,000, and that it is in a 30 percent tax bracket. Compute its cash flow using the format below.

  • Assume a firm has earnings before depreciation and taxes of

    268862 Computing Cash Flow Assume a firm has earnings before depreciation and taxes of $200,000 and no depreciation. It is in a 40 percent tax bracket. a. Compute its cash flow. b. Assume it has $200,000 in depreciation.

  • Benefits of depreciation, cash budgeting, and cash flow

    Simplify the differences between cash flow, operating cash flow and free cash flow. Benefits of depreciation: 1. Depreciation can help the company reduce taxes in higher income years 2.

  • Income Statement - Depreciation

    Operations as depreciation appears in both Cash Flow and the Income Statement. - No, as stated above, it affects both the Cash Flow and the Income Statement, but not the Balance Sheet.

  • Net Income and Cash Flow

    134580 Net Income and Cash Flow The Monday Corporation expects to have sales of $20,000,000. Costs other than depreciation are expected to be 70% of sales, and depreciation is expected to be $3,000,000.

View More Related Solutions