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Nataro, Incorporated, has sales of $742,000, costs of $316,000, depreciation expense of $39,000, interest expense of $34,000, a tax rate of 21 percent, and paid out $125,000 in cash dividends. The common stock outstanding is 75,000 shares.

Respuesta :

sakshigupta4990

Depreciation = 1.67.

Depreciation is the cost of an asset that has been depreciated over a period of time and indicates how much of the asset has been used up during the year. Accumulated depreciation is the total depreciation expense assigned to an asset since it was used.

For example, Company A owns a vehicle with a useful life of $ 100,000 for five years. I would like to amortize at a double fixed rate. Depreciation for the first year is $ 40,000 ($ 100,000 * 2/5). The next year's depreciation is $ 24,000 (($ 100,000 – $ 40,000) * 2/5).

Solution,

Sales                           742,000

Fewer Costs                 316,000

Less Depreciation        39,000

Less Interest Expense   34,000

Income before Tax         35,300

Tax 21%.                           74,130

Income after Tax             278,870

No. of Shares                   75,000

EPS = 278,870/75,000    3.72

Dividends                         125,000      

DPS =125,000/ 75,000        1.67

Learn more about depreciation at

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