Question: Net Income and OCF During 2007, Raines Umbrella Corp. had sales of $840,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were

Net Income and OCF During 2007, Raines Umbrella Corp. had sales of $840,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $625,000, $120,000, and $130,000, respectively. In addition, the company had an interest expense of $85,000 and a tax rate of 35 percent. (Ignore any tax loss carry-back or carry forward provisions.)

a. What is Raines’s net income for 2007?

b. What is its operating cash flow?

c. Explain your results in (a) and (b).

Step by Step Solution

★★★★★

3.32 Rating (152 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

b OCF EBIT Depreciation Taxes 35000 130000 0 95000 c Net income was negative because of the ta... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

29-B-C-F-G-F (47).docx

120 KBs Word File

Students Have Also Explored These Related Corporate Finance Questions!

On December 31, Year 4, RAV Company purchased 60% of the outstanding common shares of ENS Company for $1,260,000. On that date, ENS had common shares of $500,000 and retained earnings of $130,000. In...

[10 marks] Let X, Y, Z be random variables such that X is a standard normal random variable, that is X~ conditional on X ~ N(0, 1) x, Y is a normal random variable with mean x and variance 1, Y~...

In addition, the company incurs selling and administrative expenses of $250,150. The company wishes to assign these costs to its three major retail customers, The Warehouse, Kosmo Co., and Supply...

Xenix Corp had sales of $353,866 in 2014. If management expects its sales to be $476,450 in three years, what is the rate at which the company's sales are expected to grow?

Net Income and OCF During 2007, Raines Umbrella Corp. had sales of $850,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $630,000, $120,000, and $130,000,...

Net Income and OCF: During 2010, Raines Umbrella Corp. had sales of &740,000. Costs of goods sold, administrative and selling expenses, and depreciation expenses were $610,000, $105,000, and...

1.Calculating OCF Ranney, Inc., has sales of $14,900, costs of $5,800, depreciation expense of $1,300, and interest expense of $780. If the tax rate is 40 percent, what is the operating cash flow, or...

Questions 19 & 21 long-term deb 18. Residual Claims Prescott, Inc., is obligated to pay its creditors $13,500 very soon, a. What is the market value of the shareholders' equity if assets have a...

Net Income and OCF During 2 0 2 1 , Raines Umbrella Corp. had sales of $ 8 6 5 , 0 0 0 . Cost of goods sold, administrative and selling expenses, and depreciation expenses were $ 5 3 5 , 0 0 0 , $ 1...

During 2018, Raines Umbrella Corp. had sales of $744, 000. Cost of goods sold administrative and selling expenses, and depreciation expenses were $563,000, $105,000, and 129,000 respectively. In...

Compare and explain the differences between the services listed in the following table in terms of the scope of work that is done, and the procedures that are followed (when compared to the audit...

Question 16 Statistical methods that use sample data to answer general questions about populations are termed O parameters descriptive statistics samples statistics 1 pts inferential statistics

You are the director of ABC Ltd which is connected to several other companies. Your company receives directions from another company in the group and in turn, your company gives directions to another...

Wendells Donut Shoppe is investigating the purchase of a new $18,600 donut-making machine. The new machine would permit the company to reduce the amount of part-time help needed, at a cost savings of...

McEntire Corporation began operations on January 1, 2009. During its first 3 years of operations, McEntire reported net income and declared dividends as follows. The following information relates to...

Royal Lawncare Company produces and sells two packaged products, Weedban and Greengrow. Revenue and cost information relating to the products follow: Common fixed expenses in the company total...

Singh Manufacturing Company makes two different products, M and N. The companys two departments are named after the products; for example, Product M is made in Department M. Singhs accountant has...

Explain why some transactions for governmental activities at the government- wide level are reported differently than transactions for the General Fund. Give some examples of transactions that would...

5.81 Rock singer Elvis Presley died on August 16, 1977, and his life received substantial publicity as the 25th anniversary of his death approached on August 16, 2002. On August 711, 2002, an ABC...

Ethical Considerations take a look back at example 5.7 is it deceptive advertising? Is it unethical to advertise a future value like this without a disclaimer? To answer the next five questions,...

Call Provisions TMCC has the right to buy back the securities on the anniversary date at a price established when the securities were issued (this feature is a term of this particular deal). What...

1.Incomes for production line workers in a certain city average $43.74 per hour with a standard deviation of $10.78. The incomes are skewed to the right.If a random sample of size 150 was taken: a)...

You are looking to buy a car and can afford to pay $190 per month. If the interest rate on a car loan is 0.71% per month for a 60-month loan, what is the most expensive car you can afford to buy? The...

To be effective issuing and investing in bonds, knowledge of their terminology, characteristics, and features is essential. For example: A bond's is generally $1, 000 and represents the amount...