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The Jupiter Corporation has a gross profit of $726,000 and $337,000 in depreciation expense. The Saturn Corporation also has $726,000 in gross profit, with $48,300
The Jupiter Corporation has a gross profit of $726,000 and $337,000 in depreciation expense. The Saturn Corporation also has $726,000 in gross profit, with $48,300 in depreciation expense. Selling and administrative expense is $220,000 for each company.
(a) | Given that the tax rate is 40 percent, compute the cash flow for both companies. (Omit the "$" sign in your response.) |
Jupiter | Saturn | |
Cash flow | $ | $ |
(b) | What is the difference in cash flow between the two firms? (Omit the "$" sign in your response.) |
Difference in cash flow | $ |
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