Brandywine Homecare, a not for hire business, had revenues of $12 million in 2011. Expenses other than depreciation totaled 75 percent of revenues, and depreciation expense was $1.5 million. All revenues were collected in cash during the yar and all expenses other than depreciation were paid in cash during the year and all expenses other than depreciation were paid in cash.

Question

Brandywine Homecare, a not for hire business, had revenues of $12 million in 2011. Expenses other than depreciation totaled 75 percent of revenues, and depreciation expense was $1.5 million. All revenues were collected in cash during the yar and all expenses other than depreciation were paid in cash during the year and all expenses other than depreciation were paid in cash.
a.	Construct Brandywine’s 2011 income statement.
b.	What are Brandywine’s net income, total profit margin, and cash flow?
c.	Now, suppose the company changed its depreciation calculation procedures (still within GAAP such that its depreciation expense doubled. How would this change affect Brandywine’s net income, total profit margin, and cash flow?
d.	Suppose the change had halved, rather than doubled, the firm’s depreciation expense. Now, what would  be the impact on net income, total profit margin, and cash flow?

Jeri · Answer

If you can earn a 3% average return on your investments, how much invested capital must you have to earn $98000.00 per year. Round your solution to the nearest penny if needed

Britteny · Answer

d. net income $2,250,000 total profit margin 18.5% cash flow $ 3,000,000