Homework SourseLast year ZB Paints reported its net income as 650000 A revi
Last year Z&B Paints reported its net income as $650,000. A review of its in- come statement shows that Z&B’s operating expenses (fixed and variable), excluding depreciation and amortization, were $1,500,000, its depreciation and amortization expense was $300,000, and its company’s tax rate was 35 percent. Z&B has no debt—that is, the firm is financed with stock only.
a. What were Z&B’s sales revenues last year?
b. What was Z&B’s net cash flow last year?
Last year Z&B Paints reported its net income as $650,000. A review of its in- come statement shows that Z&B’s operating expenses (fixed and variable), excluding depreciation and amortization, were $1,500,000, its depreciation and amortization expense was $300,000, and its company’s tax rate was 35 percent. Z&B has no debt—that is, the firm is financed with stock only.
a. What were Z&B’s sales revenues last year?
b. What was Z&B’s net cash flow last year?
Last year Z&B Paints reported its net income as $650,000. A review of its in- come statement shows that Z&B’s operating expenses (fixed and variable), excluding depreciation and amortization, were $1,500,000, its depreciation and amortization expense was $300,000, and its company’s tax rate was 35 percent. Z&B has no debt—that is, the firm is financed with stock only.
a. What were Z&B’s sales revenues last year?
b. What was Z&B’s net cash flow last year?
Solution
Sales revenue last year = 650,000/(1-0.35) + 1,500,000
Sales revenue last year = 2,500,000
b. net cash flow last year = 650,000 + 300,000 = 950,000
