a. Given that the tax rate is 40 percent, compute the cash flow for both companies.?
b. What is the difference in cash flow between the two firms?
The Jupiter Corporation has a gross profit of $844,000 and $348,000 in amortization expense. The Saturn Corporation has $844,000 in gross profit, with $520,000 in amortization expense. Selling and administrative expense is $172,000 for each company.