| WEEK 1 HOMEWORK ASSIGNMENT- 240 |
| Problem P2-2 (Part a only): |
| Part a. | Average Corporate Tax Rates |
| | Earnings | | | | After- | | Average |
| | Before | | Tax | | tax | | Tax |
| | Taxes | | Liability | | Earnings | | Rate |
| | 10,000 |
| | 80,000 |
| | 300,000 |
| | 500,000 |
| | 1,500,000 |
| | 10,000,000 |
| | 20,000,000 |
| Problem P2-5 |
| | Earnings before interest and taxes(EBIT): | | | | $50,000 |
| | Tax Rate: | 35% |
| Part a: The firm pays $12,000 in interest |
| | EBIT |
| | Less:Interest Expense |
| | Earnings before taxes |
| | Less: Taxes |
| | Earnings after taxes |
| | and available to |
| | common stockholders |
| Part b: The firm pays $12,000 in preferred dividends |
| | Earnings before taxes |
| | Less: Taxes |
| | Earnings after taxes |
| | Less: Preferred div. |
| | Earnings available to |
| | common stockholders |
| Problem 2-7 |
| | | Sale | Purchase | Capital | Tax Paid |
| | Asset | Price | Price | Gain | 40% |
| | A | 3,400 | 3,000 |
| | B | 12,000 | 12,000 |
| | C | 80,000 | 62,000 |
| | D | 45,000 | 41,000 |
| | E | 18,000 | 16,500 |
| Exercise 3-1 (Parts a. and b. only): |
| | | (Use Table 3.1 as example) |
| Part a. |
| | | My Company |
| | | Income Statement |
| | | For Year Ended, December 31, 200X |
| | | Sales Revenue |
| | | Less: Cost of Goods Sold |
| | | Gross Profit |
| | | Less: Operating Expenses |
| | | | Selling Expense |
| | | | Gen. & Admin. Expense |
| | | | Lease Expense |
| | | | Depreciation Expense |
| | | Total Operating Expenses |
| | | Operating Profit (EBIT) |
| | | Less: Interest Expense |
| | | Net Profit Before Taxes |
| | | Less: Income Taxes (35%) |
| | | Net Profits after Taxes |
| Part b. Income Taxes (Calculate Income Taxes Paid Only) |
| | | | Net Profit before Taxes |
| | | | Income Tax Rate |
| | | | Income Taxes Paid |
King Wave
MGMT_240_Wk1_HW.xlsx
