Name Team A firm has revenues of $100, depreciation expense of $20, cash expenses of...
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Name Team A firm has revenues of $100, depreciation expense of $20, cash expenses of $30. It faces a tax rate of 35% on operating profit. 1. Calculate its profit and OCF in column 1 and 2 below. (a) OCF= (c) Net Profit =X( Revenues Cash Expenses Depreciation )=X PBT =X * X== (d) Find the value of (Revenues - Cash Expenses )X=(CC (e) Find the value of 0.35 Depreciation == (B) (f) Find the value of (A)+(B)=C+ 2. If cash expenses decrease to $20,PBT= _ tax=0.35= and Net Profit = 3. Now with these new cash expenses, calculate the new OCF in column 3. Conclusion: When the cash expenses decrease by $ OCF increases by $ Separately (1-tax rate)*decrease in expenses =0.6510=
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