Tiêu đề Exam 1_Questions Answers.docx ✅

2 Average tax rate = 14689.5/85000=17.2818% Marginal tax rate = 24% 4) Calculating Total Cash Flow: ABC Corp shows the flowing information on its 2020 income statement: Sales =$250,000; Costs=$100,000; other expenses=$5,000; depreciation expense=$18,500; interest expense=$10,000; taxes=$15,560; dividends=$8,500. In addition, the firmed issued $7,000 in new equity during 2020 and redeemed $5,500 in outstanding long term debt. (10 points) a. What is the 2020 operating cash flow? b. What is the 2020 cash flow to creditors? c. What is the 2020 cash flow to stockholders? d. How much is the cash flow of asset? To find the OCF, we first calculate net income. Income Statement Sales $250,000 Costs 100,000 Other expenses 5,000 Depreciation 18,500 EBIT $126,500 Interest 10,000 Taxable income $116,500 Taxes 15,560 Net income $100,940 Dividends $8,500 Additions to retained earnings $92,440 a. OCF = EBIT + Depreciation – Taxes OCF = $126,500 + 18,500 – 15,560