Staycate Travels Inc. reports a gross profit of $35,000, interest expense of $4,000, a tax rate of 30% and earning after taxes of $8,610. What is Staycate’s depreciation expense?
Question 1
Josh and Amy are finance trainees at a company which has been reporting a positive cash flow for the last 5 years. Both Josh and Amy have learned in their finance courses at the university that “cash is king” and is more important than reported profits by a company. Guided by this knowledge, none of them feels a need to review the company’s cash flow pattern over time. Are they necessarily correct in their understanding about a firm’s long-term cash flow situation?
Discuss briefly in no more than 100 words
Question 2
Staycate Travels Inc. reports a gross profit of $35,000, interest expense of $4,000, a tax rate of 30% and earning after taxes of $8,610. What is Staycate’s depreciation expense?
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