Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Personal Finance Building Your Future

Authors: Robert B. Walker, Kristy P. Walker

1st edition

9780077861728, 978-0073530659

More Books

Students also viewed these Finance questions

Question

Describe the four tools commonly used in employee selection.

Answered: 1 week ago