Question

Suppose for some year the income of a small company is ​$100 comma 000100,000​; the expenses are ​$75 comma 00075,000​; the depreciation is ​$22 comma 00022,000​; and the effective income tax rateequals=3535​%. What is the ATCF for this​ year?

Answer 1

Answer:

$23,950

Explanation:

Income  ​$100,000​  

Expenses ​$75,000​

Depreciation $22,000​

income tax rate = 35​%

Income  ​$100,000​  

Expenses (​$75,000​)

Depreciation ($22,000​)

EBT          $3,000

Income Tax $3,000 * (35/100) = $1,050

Net Income $1,950

ATCF  

=Earnings Before Tax + Depreciation

=$1,950 + $22,000  = $23,950