Problem 9-3 Calculating Projected Net Income [LO 2]

A proposed new investment has projected sales of $830,000. Variable costs are 55 percent of sales, and fixed costs are $187,200; depreciation is $93,500. Assume a tax rate of 40 percent.

Required:

What is the projected net income? (Do not round intermediate calculations.)

Net income

$

Problem 9-4 Calculating OCF [LO 2]

Requirement 1:

Fill in the missing numbers in the following income statement: (Do not round intermediate calculations.)

Sales	$	644,300
Costs		345,800
Depreciation		96,500
EBIT	$
Taxes (40%)
Net income	$

Requirement 2:

What is the OCF?

OCF

$

Requirement 3:

What is the depreciation tax shield?

Depreciation tax shield

$