A1. (Net Income and Net Cash Flows) Julie Stansfield has a bicycle rental shop with annual revenues

A1. (Net Income and Net Cash Flows) Julie Stansfield has a bicycle rental shop with annual revenues

Corporate Financial Management (3rd Edition): Emery, Douglas R., Finnerty, John D., & Stowe, John D. (2007)

Individual assignment: Text Problem Set IV: Chapter 10, Problems

A1. (Net Income and Net Cash Flows)

A1. Julie Stansfield

A1. (Net Income and Net Cash Flows) Julie Stansfield has a bicycle rental shop with annual revenues of $200,000. Cash operating expenses for rent, labor, and utilities are $70,000. Depreciation is $40,000. Julie's tax rate is 40%.

a. What should be Julie's net income?

b. What is her net cash flow? SOLUTION