# fm3 5 - Tax = \$22,250(\$319,500 \$100,000(0.39 = \$22,250...

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Answers and Solutions: 3- 5 3-5 NI = \$3,100,000; DEP = \$500,000; AMORT = 0; NCF = ? NCF = NI + DEP and AMORT = \$3,100,000 + \$500,000 = \$3,600,000. 3-6 NI = \$50,000,000; R/E Y/E = \$810,000,000; R/E B/Y = \$780,000,000; Dividends = ? R/E B/Y + NI – Div = R/E Y/E \$780,000,000 + \$50,000,000 – Div = \$810,000,000 \$830,000,000 – Div = \$810,000,000 \$20,000,000 = Div. 3-7 Income \$365,000 Less Interest deduction (50,000) Plus: Dividends received a 4,500 Taxable income \$319,500 a For a corporation, 70% of dividends received are excluded from taxes; therefore, taxable dividends are calculated as \$15,000(1 - 0.70) = \$4,500.
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Unformatted text preview: Tax = \$22,250 + (\$319,500 - \$100,000)(0.39) = \$22,250 + \$85,605 = \$107,855. After-tax income: Taxable income \$319,500 Taxes (107,855) Plus Non-taxable dividends received b 10,500 Net income \$222,145 b Non-taxable dividends are calculated as \$15,000 x 0.7 = \$10,500. The company’s marginal tax rate is 39 percent. The company’s average tax rate is \$107,855/\$319,500 = 33.76%. 3-8 a. Tax = \$3,400,000 + (\$10,500,000 - \$10,000,000)(0.35) = \$3,575,000. b. Tax = \$1,000,000(0.35) = \$350,000. c. Tax = (\$1,000,000)0.30(0.35) = \$105,000....
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