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Please show me how to do this analysis in excel Income and Cash Flow Analysis The Berndt Corporation expects to have sales of $12 million.
Please show me how to do this analysis in excel
Income and Cash Flow Analysis
The Berndt Corporation expects to have sales of $12 million. Costs other than depreciation are expected to be 75% of sales, and depreciation is expected to be $1.5 million. All sales revenues will be collected in cash, and costs other than depreciation must be paid for during the year. Berndts federal-plus-state tax rate is 40%. Berndt has no debt.
- Set up an income statement. What is Berndts expected net income? Its expected cash flow?
- Suppose Congress changed the tax laws so that Berndts depreciation expenses doubled. No changes in operations occurred. What would happen to be reported profit and to net cash flow?
- Now suppose that Congress changed the tax laws such that, instead of doubling Berndts depreciation, it was reduced by 50%. How would profit and net cash flow be affected?
- If this were your company, would you prefer Congress to cause your depreciation expense to be doubled of halved? Why?
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