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fenix001 [56]
2 years ago
5

Sean wants to buy a friend’s car, but he does not have the $3,000 that his friend is asking. He has $2,500 and is considering bo

rrowing the extra $500 from his sister. Sean is considering telling his friend that he needs the extra $500 for a deposit at the college he will attend next year. Sean knows his parents will be paying for this expense but feels this might be a good negotiating technique to save some money. What should he do?​
Business
1 answer:
vladimir1956 [14]2 years ago
8 0

Answer:

I think Sean should negotiate for 2,500 dollars and save the 500 dollars for college or for something else he might want or need to buy.

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Answer:

See below

Explanation:

1. The net cash after-tax cash flow effect of the preceding information of using the indirect method.

First, we need to calculate the pretax income.

Pretax income = Sales - Expenses other than depreciation - depreciation expense

Pretax income = $260 - $140 - $50 = $70

Also,

Tax expense = 35% × pretax income $70 = $24.5

Therefore, the indirect method would be;

Pretax income

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Less:

Tax expense

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After tax income

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Add:

Depreciation expense

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After-tax cash flow

$95.5

Direct method

After tax cash operating income

[($260 - $140 - $50) × (1 - tax rate 35%)]

$45.5

Add :

Depreciation expense

$50

After tax cash flow

$95.5

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Explanation:

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