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##### Finance Assignment Paper

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Question;Question 2;Based on the following information, Compute the;transfer to Retained Earnings for Year 2006. Assume a tax rate of 34%.;Year;2006;Sales;\$4018;Depreciation;577;COGS;1382;Operating Expenses;328;Interest;269;Cash;2107;A/R;2789;Short-term Notes Payable;407;Long-term Debt;7056;Net Fixed Assets;17669;A/P;2213;Inventory;4959;Dividends;490;Question 3;1.;ABC's;EBIT is \$12 million. The depreciation expense is \$0.5 million and interest;expense is \$0.5 million. The corporate tax rate is 45%. The company has 12;million in operating current assets and \$6 million operating current;liabilities. It has \$5 million in net plant and equipment. The after-tax cost;of capital (WACC) is 7%. Assume that the only non-cash item is depreciation.;The total net operating capital last year was \$6 million.;What;was the company?s economic value added (EVA)?;Question 4;1.;During;2007, ABC had sales of \$76,838. Cost of goods sold, administrative;expenses and selling expenses, and depreciation expenses were \$39,783, \$4,667;and \$9,389, respectively. In addition, the company had an interest expense of;\$3,228, and a tax rate of 39%. The company paid\$8,442 as dividends. If the;retained earnings is 2006 were \$56,786, what are the retained earnings in 2007?;Question 5;1.;ABC;company had a taxable income of \$596,721 from operations after all operating;costs but before interest charges of \$57,206, dividends received of \$45,286;dividends paid of \$10,000, and income taxes. What is the firm's after-tax;income?;Hint;first use the tax table to compute taxes before calculating the after-tax;income.;Question 6;1.;ABC;company had a taxable income of \$585,548 from operations after all operating;costs but before interest charges of \$58,540, dividends received of \$46,821;dividends paid of \$10,000, and income taxes. What is the firm's income tax;liability?;Hint;use the tax table to compute taxes.;Question 7;1.;In;its most recent financial statements, ABC Inc. reported \$49 of net income and;\$780 of retained earnings. The previous retained earnings were \$842. How much;in dividends was paid to shareholders during the year?;Question 11;1.;Culligan;Inc., has current assets of \$28,817, net fixed assets of \$145,981, current;liabilities of \$17,345, and long-term debt of \$55,546. What is the shareholders;equity?;Question 14;1.;ABC recently;reported \$47,529 of sales, \$12,670of operating costs other than depreciation;and \$5,723 of depreciation. The company had no amortization charges and;no non-operating income. It had \$8,000 of bonds outstanding that carry a;11% interest rate. How much was the firm's taxable income, or earnings before;taxes (EBT)?;Hint;Interest rate = Bonds outstanding * interest rate;Question 17;1.;ABC;company had a taxable income of \$197,222 from operations after all operating;costs but before interest charges of \$58,375, dividends received of \$63,280;dividends paid of \$5,000, and income taxes. What is the firm's income tax;liability?;Hint;use the tax table to compute taxes.;Question 18;1.;ABC;Inc. recently reported net income of \$3,822 and depreciation of \$587. What is;the net cash flow?;Question 19;1.;An;investor recently purchased a corporate bond that yields 14.4%. The investor is;in the 30% combined federal and state tax bracket. What is the bond's after-tax;yield?;Question 20;1.;ABC;corporation has operating income of \$29,706. The company's depreciation expense;is \$8,422. The company is all equity-financed and it faces a tax rate of 36%.;What is the company's net cash flow?;Question 22;1.;ABC;Corporation had \$85,839 of taxable income. Compute the tax liability.;Question 23;1.;Corporate;Bonds issued by ABC Corporation currently issued 10.5%. Municipal Bonds of;equal risk currently yield 7.3%. At what tax rate would an investor be;indifferent between these two bonds?;Question 24;1.;ABC's;EBIT is \$5 million. The depreciation expense is \$0.5 million and interest;expense is \$0.5 million. The corporate tax rate is 30%. The company has 8;million in operating current assets and \$6 million operating current;liabilities. It has \$5 million in net plant and equipment. The after-tax cost;of capital (WACC) is 6%. Assume that the only non-cash item is;depreciation. The total net operating capital last year was \$4 million.;What;was the company?s free cash flow for the year?

Paper#49425 | Written in 18-Jul-2015

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