exam1a.ch1ch2ch2Ach5ch5A

exam1a.ch1ch2ch2Ach5ch5A - Name _ Peoplesoft ID _...

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Name __________________________________ Peoplesoft ID __________________________________ University of Houston C. T. Bauer College of Business Finance 3332 Principles of Financial Management Spring, 2010 Exam 1A Point values are in parentheses. To receive full credit: Clearly indicate your answer Financial functions may be used only for finding annuity factors All inputs to find annuity factor must be shown Carry all decimals, rounding only final answer Decimal places should be rounded to four places (two in percent form) Currency answers rounded to the nearest cent, where applicable Include applicable units on answers 1. Three months ago I bought 800 shares of a stock for $70 per share. Last month I received a dividend check for $1600, and the stock is now selling for $50 per share. What is my holding period return on this stock purchase? (6) 2. What is the effective rate of interest for 6 percent compounded continuously? (4) 3. How much will you have in your account in 6 years if you deposit $500 and your account earns 8% compounded continuously? (8) 4. Lucky Industries had taxable income of $70,000. (10) Taxable Income($) Tax Calculation Up to 50,000 $0 + (15% Amount over $0) 50,001-75,000 $7500 + (25% Amount over $50,000) 75,001-100,000 $13,750 + (34% Amount over $75,000) 100,001-335,000 $22,250 + (39% Amount over $100,000) 335,001-10,000,000 $113,900 + (34% Amount over $335,000) 10,000,001-15,000,000 $3,400,000 + (35% Amount over $10,000,000) 15,000,001-18,333,333 $5,150,000 + (38% Amount over $15,000,000) Over 18,333,333 35% X Taxable Income a) What is the firm’s income tax liability? b) What is the firm’s average tax rate? (Show calculation)
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exam1a.ch1ch2ch2Ach5ch5A - Name _ Peoplesoft ID _...

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