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# A] Simpson helped start Excel Systems in 2010. At the time. he purchased 116,000 shares of stock at \$1 per share. In 2015, he has the opportunity to

A] Simpson helped start Excel Systems in 2010. At the time. he purchased 116,000 shares of stock at \$1 per share. In 2015, he has the opportunity to sell his interest in
the company to Folsom Corp. for \$50 a share in cash. His capital gains tax rate would be 15 percent. a. If he sells his interest, whatwill be the value for before-tax profit, taxes, and aftertax proﬁt? {Do not round Intermediate calculations. Round your final answers
to the nearest dollar amount.) h. Assume. instead of cash. he accepts Folsom Corp. stock valued at \$50 per share. He pays no tax at that time. He holds the stock for five years and then sells it for
\$82.50 {the stock pays no cash dividends). What will be the value for before~tax proﬁt, taxes. and aﬁertax proﬁt in 2020? His capital gains tax is once again 15 percent.
[Do not round intermediate calculations. Round your ﬁnal answers to the nearest dollar amount.) c. What is the present value (Year 2015) of the aﬁertax proﬁt computed in Requirement h? Use a 9 percent discount rate. Use appendix B as an approximate answer,
but calculate yourﬁnal answer using the formula and ﬁnancial calculator methods. [Do not round intermediate calculations. Round your ﬁnal answer to the
nearest dollar amount.) Mammt —

question a Value for before-tax profit = 5684000 capital gain taxes = 852600... View the full answer

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