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For the next fiscal year, CoolDown Cola is forecasting depreciation expense to be $35,000, EBIT to be $75,000, and interest expense to be $20,000. The
For the next fiscal year, CoolDown Cola is forecasting depreciation expense to be $35,000, EBIT to be $75,000, and interest expense to be $20,000. The firm's effective tax rate is 30%. What is CoolDown Cola's forecasted: EBIT? Net income before dividends? Net operating profit after tax (NOpPAT)? Operating cash flow (OpCF)? It turns out that Congress is currently considering a proposal that will allow firms to depreciate their equipment at a faster rate. If this provision were put in place, CoolDown's forecasted depreciation expense would increase from $35,000 to $60,000. This proposal would have no effect on the economic value of the firm's equipment, nor would it affect the firm's tax rate, which would remain at 30%. If this proposal were to be implemented, what would be CoolDown Cola's forecasted: EBIT? Net income before dividends? Net operating profit after tax (NOpPAT)? Operating cash flow (OpCF)? If the new proposal were to be implemented, what would be the S change in CoolDown Cola's forecasted: EBIT? Net income before dividends? Net operating profit after tax (NOpPAT)? Operating cash flow (OpCF)? And, finally, is this Congressional proposal positive for CoolDown? Briefly explain
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