Taxable income = $670,000 - $460,000 - $50,000 - $55,000 = $105,000; Tax = .34($105,000) = $35,700; Net income = $105,000 - $35,700 = $69,300 AACSB: Analytic Blooms: Apply Difficulty level: 2 Medium Topic: The Income Statement 57. the tax rates as shown, what is the average tax rate for a firm with taxable income of $126,500? Tax = .15($50,000) + .25($25,000) + .34($25,000) + .39($126,500 - $100,000) = $32,585; Average tax rate = $32,585 ÷ $126,500 = .2576 = 25.76% AACSB: Analytic Blooms: Apply Difficulty level: 2 Medium Topic: Taxes 58. The tax rates are as shown. Your firm currently has taxable income of $79,400. How much additional tax will you owe if you increase your taxable income by $21,000? Additional tax = .34($100,000 - $79,400) + .39($79,400 + $21,000 - $100,000) = $7,160 AACSB: Analytic Blooms: Apply Difficulty level: 2 Medium Topic: Taxes 59. Your firm has net income of $198 on total sales of $1,200. Costs are $715 and depreciation is $145. The tax rate is 34%. The firm does not have interest expenses. What is the operating cash flow? Earnings before interest and taxes = $1,200 - $715 - $145 = $340; Tax = [$198 ÷ (1 - .34)] - $198 = $102; Operating cash flow = $340 + $145 - $102 = $383
Taxable income = $670,000 - $460,000 - $50,000 - $55,000 = $105,000; Tax = .34($105,000) = $35,700; Net income = $105,000 - $35,700 = $69,300 AACSB: Analytic Blooms: Apply Difficulty level: 2 Medium Topic: The Income Statement 57. the tax rates as shown, what is the average tax rate for a firm with taxable income of $126,500? Tax = .15($50,000) + .25($25,000) + .34($25,000) + .39($126,500 - $100,000) = $32,585; Average tax rate = $32,585 ÷ $126,500 = .2576 = 25.76% AACSB: Analytic Blooms: Apply Difficulty level: 2 Medium Topic: Taxes 58. The tax rates are as shown. Your firm currently has taxable income of $79,400. How much additional tax will you owe if you increase your taxable income by $21,000? Additional tax = .34($100,000 - $79,400) + .39($79,400 + $21,000 - $100,000) = $7,160 AACSB: Analytic Blooms: Apply Difficulty level: 2 Medium Topic: Taxes 59. Your firm has net income of $198 on total sales of $1,200. Costs are $715 and depreciation is $145. The tax rate is 34%. The firm does not have interest expenses. What is the operating cash flow? Earnings before interest and taxes = $1,200 - $715 - $145 = $340; Tax = [$198 ÷ (1 - .34)] - $198 = $102; Operating cash flow = $340 + $145 - $102 = $383
test-bank-corporate-finance-10th-edition-ross.docx