Question
Problem 9-5 Cash Flows (LO2) Tubby Toys estimates that its new line of rubber ducks will generate sales of $7.80 million, operating costs of $4.80
Problem 9-5 Cash Flows (LO2) Tubby Toys estimates that its new line of rubber ducks will generate sales of $7.80 million, operating costs of $4.80 million, and a depreciation expense of $1.80 million. Assume the tax rate is 30%. a. Calculate the operating cash flow for the year by using all three methods: (a) adjusted accounting profits; (b) cash inflow/cash outflow analysis; and (c) the depreciation tax shield approach. (Enter your answers in millions rounded to 2 decimal places.) Method Cash Flow Adjusted accounting profits $ million Cash inflow/cash
Problem 9-5 Cash Flows (LO2)
Tubby Toys estimates that its new line of rubber ducks will generate sales of $7.80 million, operating costs of $4.80 million, and a depreciation expense of $1.80 million. Assume the tax rate is 30%. |
a. | Calculate the operating cash flow for the year by using all three methods: (a) adjusted accounting profits; (b) cash inflow/cash outflow analysis; and (c) the depreciation tax shield approach. (Enter your answers in millions rounded to 2 decimal places.) |
Method | Cash Flow |
Adjusted accounting profits | $ million |
Cash inflow/cash outflow analysis | million |
Depreciation tax shield approach | million |
b. | Are the above answers equal? | ||||
|
analysis million Depreciation tax shield approach million b. Are the above answers equal? Yes No
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