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It is easiest to illustrate the calculation of economic cash flows by example As in 3, we will use Billabong Boomerangs for our examples We adjust cash flows to economic cash flows in Table 41A Some of this will be a repeat from 3; however, we will use the numbers in different ways here In Table 41A, we begin with net income before taxes of $1 million (cell B5) From this, we subtract $400,000 (B6) of corporate taxes to arrive at net income after taxes of $600,000 (B7) We add back depreciation expense of $75,000 (B8)8 and subtract capital expenditures and the increase in net working capital of $125,000 (B9) and $50,000 (B10), respectively, to calculate the cash flow of Billabong Boomerangs of $500,000 (B11) Now we make the adjustments to arm s length salaries We add back Connie s and Bobby s actual salaries of $250,000 (B13) and $50,000 (B14), and we subtract their arm s length salaries of $100,000 (B15) and zero (B16) The net adjustment is to add back $200,000 (B17) to economic cash flow However, if we were to add that back to net income, the company would have been taxed an additional $200,000 40% $80,000 (B18), so the net addition is $120,000 (B19) Thus, economic cash flow is $500,000 $120,000 $620,000 (B11 B19 B20) There is an alternate calculation in the bottom half of the table that, besides verifying this result, also will enable us to calculate the Payout Ratio9 In Section 2 we repeat net income before taxes of $1 million from B5 in B23 We add back the $200,000 (B24, which comes from B17) of excess compensation, for economic net income before taxes of $1,200,000 (B25) We

navBarController to the newly added navigation controller (Figure 9-18) Connect the tabBarController to the newly added tab bar controller

void drawCircle (ShapeRect bounds, ShapeColor fillColor) { NSLog (@"drawing a circle at (%d %d %d %d) in %@", bounds.x, bounds.y, bounds.width, bounds.height, colorName(fillColor)); } // drawCircle

11 Save your changes 12 Edit StepTwoViewControllerm and implement the viewDidLoad method so that it sets the

The colorName() function called inside NSLog() simply does a switch on the passed-in color value and returns a literal NSString such as @"red" or @"blue":

It was already included in expenses the detail of which is not shown in this table that are part of the calculation of the $1 million net income before taxes 9 The Payout Ratio is the percentage of net income distributed to owners

navigationItem s title to step two (Listing 9-9) Listing 9-9 StepTwoViewController s viewDidLoad method

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NSString *colorName (ShapeColor colorName) { switch (colorName) { case kRedColor: return @"red"; break; case kGreenColor: return @"green"; break; case kBlueColor: return @"blue"; break; } return @"no clue"; } // colorName

-(void)viewDidLoad { [super viewDidLoad]; selfnavigationItemtitle = @"step two"; } 13 Open FirstTabViewControllerh and import StepTwoViewControllerh and

NavInTabAppDelegateh Also add the method signature, takeNextStep (Listing 9-10)

A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Section 2: Calculation of Economic Net Income 23 Net Income Before Taxes (B5) 24

The other draw functions are almost identical to drawCircle, except that they draw a rectangle and an egg. Here is the output of Shapes-Procedural (minus the time stamp and other information added by NSLog()):

9:

drawing a circle at (0 0 10 30) in red drawing a rectangle at (30 40 50 60) in green drawing an egg at (15 18 37 29) in blue

Figure 9-18

41A

This all seems pretty simple and straightforward, right When you use procedural programming, you spend your time connecting data with the functions designed to deal with that type of data. You have to be careful to use the right function for each data type: for example, you must call drawRectangle() for a shape of type kRectangle. It s disappointingly easy to pass a rectangle to a function meant to work with circles. Another problem with coding like this is that it can make extending and maintaining the program difficult. To illustrate, let s enhance Shapes-Procedural to add a new kind of shape: a triangle. You can find the modified program in the 03.09 Shapes-Procedural-2 project. We have to modify the program in at least four different places to accomplish this task.

Listing 9-10

#import<UIKit/UIKith> #import "StepTwoViewControllerh" #import "NavInTabAppDelegateh" @interface FirstTabViewController : UIViewController { } -(IBAction) takeNextStep: (id) sender; @end 14 Open FirstTabViewControllerm and implement the newly added action The file should

First, we ll add a kTriangle constant to the ShapeType enum:

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