Ch01_Solutions_6e

Ch01_Solutions_6e - CHAPTER 1 PROBLEMS AN INTRODUCTION TO...

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CHAPTER 1 PROBLEMS AN INTRODUCTION TO THE FOUNDATIONS OF FINANCIAL MANAGEMENT - THE TIES THAT BIND PROBLEM 1-1 CORPORATE INCOME TAX Corporate Tax Rates: 15% $0-50,000 25% 50,001-75,000 34% 75,000-100,000 39% 100,000-335,000 34% 335,000 and over DATA Sales 3,000,000 (2,100,000) Operating Profit 900,000 Dividend income 6,000 Less: 70% (4,200) 1,800 (0.70) Interest exp (400,000) S-T Capital Gain: Selling price 50,000 Cost (45,000) 5,000 L-T Capital Gain: Selling price 100,000 Cost (80,000) 20,000 Taxable income 526,800 Tax Liability: 0.15 50,000 7,500 0.25 75,000 6,250 0.34 100,000 8,500 0.39 335,000 91,650 0.34 335,000 65,212 Taxes due : 179,112 PROBLEM 1-2 CORPORATE INCOME TAX
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Corporate Tax Rates 15% $0-50,000 25% 50,001-75,000 34% 75,000-100,000 39% 100,000-335,000 34% 335,000 and over DATA Sales 5,000,000 COGS (2,000,000) GP 3,000,000 Oper exp (1,000,000) Interest income 20,000 Dividend income 25,000 Less: 70% (17,500) 7,500 (0.70) Interest exp (100,000) Taxable income 1,927,500 Capital Gains and Losses: Security gain 40,000 Security loss (50,000) Loss on S-T capt gain (10,000) Tax Liability: 0.15 50,000 7,500 0.25 75,000 6,250 0.34 100,000 8,500 0.39 335,000 91,650 0.34 335,000 541,450 Taxes due : 655,350 PROBLEM 1-3 CORPORATE INCOME TAX Corporate Tax Rates 15% $0-50,000 25% 50,001-75,000 34% 75,000-100,000 39% 100,000-335,000 34% 335,000 and over DATA Sales 3,000,000
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COGS (2,000,000) Gross profit 1,000,000 Operating expenses (400,000) Depreciation expense (100,000) Dividend income 50,000 Less: 70% (35,000) 15,000 (0.70) Interest expense (150,000) Taxable income 365,000 Tax Liability: 0.15 50,000 7,500 0.25 75,000 6,250 0.34 100,000 8,500 0.39 335,000 91,650 0.34 335,000
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Ch01_Solutions_6e - CHAPTER 1 PROBLEMS AN INTRODUCTION TO...

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