Finance 101 help!
Rutgers University FINANCE Hengguo Da
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Assignment 1 Due date:11:30 am June 11 2018
Instructions: You will have to answer three problems; The first has 5 credits, the second
has 10 credits, and the third has 10 credits. The total credits are 25 credits. You should
write down necessary steps to solve problems. Only final correct answers in every
problem will not get full credits.
1. Tax Calculation (5 credits)
The firm C has taxable income 76000.
Taxable Income Tax Rate
0 50000 0.15
50001 75000 0.25
75001 100000 0.34
100001 335000 0.39
335001 10000000 0.34
(1) Based on tax table above, please find marginal tax rate for firm
C. (2 credits)
(2) According to tax table above, please calculate total tax of firm C
and average tax rate for Firm c. (3 credits)
2. Balance sheet (10 credits)
The following statement is the balance sheet of firm A.
Balance Sheet of Firm A(units: million)
Current Asset: Current Liabilities:
Cash and Equivalents 100 Accounts payable
Accounts Receivable Total Current Liabilities 186
Inventory 78
Total Current Assets Long Term Liabilities:
Deferred Taxes
Fixed Assets: Long Term debt 137
Property,Plant,and equipment Total Long Term Liability 157
Rutgers University FINANCE Hengguo Da
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Less Accumulated Depreciation 420
Net Property,plant,and Equipment Stockholders' Equity:
Preferred Stock 39
Intangible Assests and Others 244 Common Stock 55
Total Fixed Assets 502 Capital Surplus 147 Accumulated Retained Earnings 190
Total Assets Less Treasury Stock 26 Total Equity 405
Total Liabilities and Equity
(1) According accounting rules and accounting equation to fill red box
(5 credits).
(2) If firm A sells products whose value is 10 million and the value is
not paid in cash. The firm A will get cash in the future. In this case,
which item in the balance sheet will increase and which item in the
balance sheet will decrease? (5 credits)
3. Financial Cash flow and statement of cash flows (10
credits)
You are researching Time Manufacturing and have found the following
accounting statement of cash flows for the most recent year. You also
know that the company paid $84 million in current taxes and had an
interest expense of $41 million.
Statement of Cash flows(units:million)
Operation
Net income 192
Depreciation 76
Deferred Taxes 13
Change in Assets and liabilities
Rutgers University FINANCE Hengguo Da
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Acccounts receivable -16
Inventories 17
Accounts payable 13
Accrued Expenses -7
Other 2
Total cash flow from operation 290
Investing activities
Acquisition of fixed assets -198
Sale of fixed assets 21
Total cash flow from investing activities -177
Financing Activities
Retirement of long-term debt -150
proceeds from long-term debt sales 115
change in notes payable 8
Dividends -81
Repurchase of stock -11
Proceeds from long-term debt sales 43
Total cash flow from financing activities -76
change in cash(balance sheet) 37
(1) Use information above :interest expenses, current tax and statement of
cash flow to compute financial cash flow(5 credits).(hint: please first
calculate cash flows from three parts and then sum them)
(2) Based on Statement of cash flow, please calculate the cash flow for
shareholders and cash flow for debtholders. Based on Calculation, write
down the equation about Cash flow for different stakeholders. (5 credits)