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

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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 companys marginal tax rate is 39 percent. The companys 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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