Question
What is included in the calculation for earnings before tax? Here is the question I am trying to figure out. Use the eight year model,
What is included in the calculation for earnings before tax?
Here is the question I am trying to figure out.
Use the eight year model, along with Andre's estimates for questions a. thru e.
a.At the end of the project, what is Ma & Pa Incorporated's earnings before taxes then?____.At the current tax rate for Ma & Pa incorporated, what is Ma & Pa Incorporated's net income?
I have total up front costs of $2,200,000
Cost of capital $195,000
total sales for the project $10,578,196.49
total project cash expenses $2,660,720.41
total project depreciation $250,000
tax rate is 35%
I came up with $5,272,476.09 but I am not sure if I am supposed to include the depreciation and cost of capital in this.
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