Posted by Mesha on .
The Monley Corporation of New Jersey has gross profits of $980,000 and $260,000 in depreciation expense. The Majors Corporation of Nebraska also has $980,000 in gross profit, with $60,000 in depreciation expense. Selling and administrative expense is $120,000 for each company.
Compute the cash flow for both companies with a tax rate of 40%. Explain the difference in cash flow between the two firms.
THIS IS THE TABLE I MUST FILL IN.
Gross profit Selling and admin expense
Depreciation Operating profit
Earnings after tax
Plus depreciation expense