FOR ALL PLEASE SHOW WORK AND HOW YOU WOULD INPUT INTO CALCUALTOR 1. Your company
ID: 2789356 • Letter: F
Question
FOR ALL PLEASE SHOW WORK AND HOW YOU WOULD INPUT INTO CALCUALTOR
1. Your company reports 20015
taxable income of $300,000. How large is the firm’s tax bill?
(100,250)
2. In the previous question what is the average tax rate, and the marginal tax rate? (33.42%, 39%)
3. ABC Corporation reported retained earnings of $1,250 on its year
-end 200
6 balance sheet.
During 2007, the company reported a loss of $320 in net income, and it paid out a
dividend of $200. What will retained earnings be for ABC’s 200
7 year
-end balance
sheet?
(730)
4. If total assets = $900, fixed assets = $550, current liabilities = $250, equity = $175, long-term
debt = $475, and current assets is the only remaining item on the balance sheet, what is the value
of net working capital? (100)
5. Given the following income statement data, calculate net income: sales = $2,500, cost of goods
sold = $1,800, miscellaneous expenses = $200, depreciation = $150, interest expense = $
50, tax
rate = 35%. (195)
6. Based on the following information, calculate stockholders' equity: Cash = $ 5; Accounts
Payable = $22; Other Current Liabilities = $65; Accounts Receivable = $20; Inventory = $50; Net
Fixed Assets = $175; and Long-term Debt =
$40. (all the numbers are in millions) (123)
7. Alpha company is considering investing in a project that will generate $46,500 in two years
and has no other cash flows. The discount rate is 8% compounded
annually. What is the
maximum price Alpha is willing to pay for this project
today?
8. You received a $100 savings account earning 6% with annual
compounding on your 1st
birthday. How much will you have in the account on your 25th birthday if you don’t withdraw
any money before then?
9. Your grandfather placed $5,000 in a trust fund for you. In 12 years the fund will be worth
$11,261. What is annual rat
e o
f return (APR)
on the trust fund with annual compounding?
10. You need $2,000 to buy a new stereo for your car. If you have $1,491 to invest at 6%
compounded
annually
, how
many years
will you have to wait to buy the stereo?
11. A firm has total debt of $4,850 and a debt
-equity ratio of 0.57. What is the value of the total
assets?
12. Russell's Deli has cash of $136, accounts receivable of $95, accounts payable of $210, and
inventory of $409.
There are no other current assets or current liabilities. What is the value of the
quick ratio?
Explanation / Answer
(1)
(i) Taxable Income = $ 300000, This income lies in the 39% income bracket.
Total Tax Liability = 22250 + 39% of amount above $ 100000 = 22250 + (300000 - 100000) x 0.39 = $ 100250
(ii) Average Tax Rate - (Total Tax Liability) / Taxable Income = (100250/300000) = 0.3342 or 33.42 %
Marginal Tax Rate = Applicable Tax Bracket = 39 %
NOTE: Please raise separate queries for solutions to the remaining unrelated questions.
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