1. Pharrell, Inc., has sales of $585,000, costs of $273,000, depreciation expense of $71,000, interest expense of $38,000, and a tax rate of 35 percent. What is the net income for this firm?
2. Hailey, Inc., has sales of $19,670, costs of $9,360, depreciation expense of $2,030, and interest expense of $1,520. Assume the tax rate is 30 percent. What is the operating cash flow, or OCF?
3. The profit margin is 20% and the retention ratio is 30%. Last year’s sales were $50 million and total assets were $40 million. None of the liabilities vary directly with sales, but assets and costs do. If the sales growth rate is 20%, how much external financing is needed?