Over the last five years, corporation A has been consistently profitable. Its earnings before taxes were as follows: Year 1 2 3 4 5 Earnings $1,300 $3,000 $4,000 $5,300 $4,800 If the corporate tax rate was 29 percent, what were the firm's income taxes for each year? Round your answers to the nearest dollar. Year 1 2 3 4 5 Taxes $ $ $ $ $ Unfortunately, in year 6 the firm experienced a major decline in sales, which resulted in a loss of $10,300. What impact will the loss have on the firm's taxes for each year if the permitted carry-back is two years? If the answer is zero, enter "0". Round your answers to the nearest dollar. Year 1 2 3 4 5 New Taxes $ $ $ $ $ Total tax refund: $

Over the last five years, corporation A has been consistently profitable. Its earnings before taxes were as follows: Year 1 2 3 4 5 Earnings $1,300 $3,000 $4,000 $5,300 $4,800 If the corporate tax rate was 29 percent, what were the firm's income taxes for each year? Round your answers to the nearest dollar. Year 1 2 3 4 5 Taxes $ $ $ $ $ Unfortunately, in year 6 the firm experienced a major decline in sales, which resulted in a loss of $10,300. What impact will the loss have on the firm's taxes for each year if the permitted carry-back is two years? If the answer is zero, enter "0". Round your answers to the nearest dollar. Year 1 2 3 4 5 New Taxes $ $ $ $ $ Total tax refund: $

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 17P: The Raattama Corporation had sales of $3.5 million last year, and it earned a 5% return (after...

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(Please dont answer in excel, i do not understand it yet. please answer in an equation or worded answer please, thank you.) Over the last five years, corporation A has been consistently profitable. Its earnings before taxes were as follows: Year Year 1 Year 2 Year 3 Year 4 Year 5 Earnings 1,000 3,000 4,300 5,200 4,400 If the corporate tax rate was 25 percent, what were the firm’s income taxes for each year? Unfortunately, in year 6 the firm experienced a major decline in sales, which resulted in a loss of $10,800. What impact will the loss have on the firm’s taxes for each year if the permitted carry-back is two years?
Over the last five years, corporation A has been consistently profitable. Its earnings before taxes were as follows: Year 1 2 3 4 5 Earnings $1,300 $3,100 $4,400 $5,100 $4,600 If the corporate tax rate was 25 percent, what were the firm's income taxes for each year? Round your answers to the nearest dollar. Year 1 2 3 4 5 Taxes $ $ $ $ $ Unfortunately, in year 6 the firm experienced a major decline in sales, which resulted in a loss of $11,300. What impact will the loss have on the firm's taxes for each year if the permitted carry-back is two years? If the answer is zero, enter "0". Round your answers to the nearest dollar. Year 1 2 3 4 5 New Taxes $ $ $ $ $ Total tax refund: $
Suppose a firm's tax rate is 25%. 1. What effect would a $10.92 million operating expense have on this year's earnings? What effect would it have on next year's earnings? (Select all the choices that apply.) A. $10.92 million operating expense would be immediately expensed, increasing operating expenses by $10.92 million. This would lead to a reduction in taxes of 25%×$10.92 million=$2.73 million. B. A $10.92 million operating expense would be immediately expensed, increasing operating expenses by $10.92 million. This would lead to an increase in taxes of 25%×$10.92 million=$2.73 million C. Earnings would decline by $10.92 million−$2.73 million=$8.19 million. There would be no effect on next year's earnings. D. Earnings would decline by $10.92 million−$2.73 million=$8.19 million. The same effect would be seen on next year's earnings 2. What effect would a $10.25 million capital expense have on this year's earnings if the capital expenditure is depreciated at a rate of $2.05…
A startup's accountant has just prepared the year-end income statement for its third year of operations. It has finally become profitable with profit before tax of $575,000 in year three after incurring losses of $250,000 in year one and $125,000 in year two. Given a corporate tax rate of 25%, how much income tax will the company owe based on year three results?
The Raattama Corporation had sales of $3.5 million last year, and it earned a 5% return (after taxes) on sales. Recently, the company has fallen behind in its accounts payable. Although its terms of purchase are net 30 days, its accounts payable represents 60 days’ purchases. The company’s treasurer is seeking to increase bank borrowing in order to become current in meeting its trade obligations (that is, to have 30 days’ payables outstanding). The company’s balance sheet is as follows (in thousands of dollars): How much bank financing is needed to eliminate the past-due accounts payable? Assume that the bank will lend the firm the amount calculated in part a. The terms of the loan offered are 8%, simple interest, and the bank uses a 360-day year for the interest calculation. What is the interest charge for 1 month? (Assume there are 30 days in a month.) Now ignore part b and assume that the bank will lend the firm the amount calculated in part a. The terms of the loan are 7.5%, add-on interest, to be repaid in 12 monthly installments. What is the total loan amount? What are the monthly installments? What is the APR of the loan? What is the effective rate of the loan? Would you, as a bank loan officer, make this loan? Why or why not?
Suppose a firm's tax rate is 25%. a. What effect would a$9.85 million operating expense have on this year's earnings? What effect would it have on next year's earnings? b. What effect would an $8.95million capital expense have on this year's earnings if the capital is depreciated at a rate of $1.79 million per year for five years? What effect would it have on next year's earnings?
Grommit Engineering expects to have net income next year of $24.36 million and free cash flow of $22.17 million. Grommit's marginal corporate tax rate is 35%. a. If Grommit increases leverage so that its interest expense rises by $6.7 million, how will net income change? b. For the same increase in interest expense, how will free cash flow change? a. If Grommit increases leverage so that its interest expense rises by $6.7 million, how will net income change? Net income will fall to $ 4.36 million. (Round to two decimal places.) b. For the same increase in interest expense, how will free cash flow change? (Select the best choice below.) A. Free cash flow increases by the amount of the interest expense. B. Free cash flow decreases by the amount of the interest expense. C. Free cash flow is not affected by interest expense. D. None of the above.
Suppose a firm's tax rate is 25%. a. What effect would a $9.05 million operating expense have on this year's earnings? What effect would it have on next year's earnings? b. What effect would a $10.2 million capital expense have on this year's earnings if the capital expenditure is depreciated at a rate of $2.04 million per year for five years? What effect would it have on next year's earnings? a. What effect would a $9.05 million operating expense have on this year's earnings? What effect would it have on next year's earnings? (Select all the choices that apply.) A. A $9.05 million operating expense would be immediately expensed, increasing operating expenses by $9.05 million. This would lead to a reduction in taxes of 25% x $9.05 million = $2.26 million. B. A $9.05 million operating expense would be immediately expensed, increasing operating expenses by $9.05 million. This would lead to an increase in taxes of 25% × $9.05 million = $2.26 million. C. Earnings would decline by $9.05…
A market research firm with current sales of $750 does not expect any growth in sales for the next two years. The company, however, anticipates that expenses, currently at $160, will increase to $240 next year and to $270 the year after. Assuming a tax rate of 34%, determine the firm’s cash flow in year two. Assume straight line depreciation of $50 each year. Select one: a. ($333.80) b. $389.40 c. ($389.40) d. $333.80 e. $366.00
A market research firm with current sales of $750 does not expect any growth in sales for the next two years. The company, however, anticipates that expenses, currently at $160, will increase to $240 next year and to $270 the year after. Assuming a tax rate of 34%, determine the firm’s cash flow in year two. Assume straight line depreciation of $50 each year. Select one: a. ($333.80) b. $389.40 c. ($389.40) d. $333.80 e. $366.00 Clear my choice
Give typing answer with explanation and conclusion Consider two firms, Alpha, Inc. and Omega Corporation. Both corporations will either make $20 million or lose $10 million every year with equal probability. The firms' profits are perfectly positively correlated. That is, any year Alpha, Inc. earns $20 million, Omega Corporation also makes $20 million, and the same is true of a losing year. Assume that the corporate tax rate is 34%. What are the total expected after-tax profits of both firms when they are two separate firms?
Your company received a $9 million order on the last day of the year. You filled the order with $3 million worth of inventory. The customer picks up the order the same day and pays $3 million up front in cash; you also issue a bill for the customer to pay the remaining balance of $6 million within 40 days. Suppose your firm’s tax rate is 0% (ignore taxes). Based on the above information; a.Your earnings went up by $9 million b.No option is correct c. Your earnings did not change d.Your earnings went up by $6 million