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Chapter 2 Homework

Chapter 2 Homework - Francis Roman FIN100.2 Chapter 2 1...

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Francis Roman FIN100.2 Chapter 2 1. Given Current Assets $4,000 Current Liabilities $3,400 Net Fixed Assets $22,500 Long-term Debt $6,800 $26,500 $10,200 Equation Share Holder's Equity $26,500 $4,000 $10,200 $3400 Solution $16300 $600 2. Given sales = $634,000 costs = $305,000 tax rate = 35% depreciation = $46,000 interest expense = $29,000 Equation sales 634000 - costs -305000 - expenses -46000 -29000 254000 - tax rate - .35 88900 Solution net income = $165,100 3. Given same problem from #2, with $86,000 dividends Equation Addition to retained earnings = Net income - Cash dividends 165,100 - 86,000 = 79,100 Solution Addition to retained earnings = $79,100 4. Given Firm had $30,000 shares of common stock outstanding Equation EPS= net income/total shares outstanding Dividends per share = Cash dividends / Common stock outstanding Solution 165,100/30,000 = $5.50 EPS 86,000/30,000 = 2.87 DPS 5. Given Net Working Capt: Book = $410k Market = 1.8 M Net Fixed Assets: Book = 7 M Market = 3.7 M Equation Net Working Capt + Net Fixed Assets = Book/Market Value Capital
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Solution Book: 410k + 7 M = 7.410 M Market: 1.8 M + 3.7 M = 5.5 M 6. Given Taxable Income $325000 Equation .15 * 50,000 $7500 .25 * 25,000 $6250 Solution .34 * 25,000 $8500 .39 * 225,000 $87750 Income Taxes $110000 7. Given total taxes = $110,000, taxable income = $325,000 Equation
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