which the corporation operates, find the equivalent after-tax rate of return (ROR) required of projects that are justified only if th demonstrate a before-tax return of 22% per year. Use the table given below to calculate taxes, the average tax rate Te and aft
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- A company earns before-tax profit of 200 000. It must pay 1) 10% of its after-tax profits to Natural Conservation Fund (N) ; 2) State tax (S) of 10% (after N); 3) Federal tax (F) of 20% (after S and N). Write the system of equatios to find N,S,F and determine If it is consistent.A company, based in the Midwest, requires an 8.000% after tax rate of return. The state tax rate is 5% and the company is in the 21% federal tax bracket.Using the combined incremental tax rate equation on p. 433 of the textbook and the after-tax rate of return equation on p. 439, what is the estimate of the before-tax rate ofreturn required.Give rate of return in percent to 3 decimal places like 10.134% or 9.765%Compute the required before-tax retum if an after-tax return of 7% per year is expected and the state and local tax rates total 4.2%. The effective federal tax rate is 34%!
- A company with a WACC of 14% is evaluating two projects for this year. The following is the estimated cash flow after deducting tax, including depreciation, as follows: (on the image below) a. Calculate the NPV, IRR, and payback, for each of these projects.b. If it were assumed that the two projects were independent, which project would you recommend?c. If the two projects were mutually exclusive, which project would you recommend?A small corporation is expecting an annual taxable income of $45,000 for its tax year. It is considering an additional capital investment of $100,000 in an engineering project, which is expected to create an added annual net cash flow (revenues minus expenses) of $35,000 and an added annual depreciation deduction of $20,000. What is the corporation’s federal income tax liability ▫without the added capital investment, ▫with the added capital investment?Compute the required before-tax return if an after-tax return of 7% per year is expected and the state and local tax rates total 4.2%. The effective federal tax rate is 34%
- ABC Corp operates in the city and would besubjected to the following taxes: i. Federal corp income tax-surtax 26% and normal tax 22% ii. State Franchise tax-72% If income before taxes for 2018 was $370,000 per the federal tax return (after establishing estimate), assuming the rates as noted above, the tax liabilities that should be set up are Federal and State, A, $180,000; $25,000 B.$177,600; $29,700 C. $165,500;$20,000 D. $171,000; $30,000Company N will receive $55,000 of taxable revenue from a client. Use Appendix A and Appendix B. Required: Compute the NPV of the $55,000 assuming that Company N will receive $27,500 now (year 0) and $27,500 in year 1. The company’s marginal tax rate is 30 percent, and it uses a 6 percent discount rate. Compute the NPV of the $55,000 assuming that Company N will receive $27,500 in year 1 and $27,500 in year 2. The company’s marginal tax rate is 40 percent, and it uses a 4 percent discount rate. Compute the NPV of the $55,000 assuming that Company N will receive $11,000 now (year 0) and $11,000 in years 1, 2, 3, and 4. The company’s marginal tax rate is 10 percent, and it uses a 9 percent discount rate.Jurisdiction B’s tax system consists of a 6.5 percent general sales tax on retail goods and selected services. Over the past decade, the average annual volume of sales subject to this tax was $1,100 million. The jurisdiction needs to increase its tax revenues by approximately $11.0 million each year to finance its spending programs. The taxing authorities are considering two alternatives: a 1 percent increase in the sales tax rate or a new 2 percent tax on the net income of corporations doing business in the jurisdiction. Based on recent economic data, the annual net income subject to the new tax would be $575 million. However, the jurisdiction would have to create a new agency responsible for enforcing and collecting the income tax. The estimated annual cost of the agency is $500,000. Jurisdiction B borders four other taxing jurisdictions, all of which have a general sales tax and two of which have a corporate income tax. Required: 1. Based on a static forecast, how much incremental…
- A small corporation is expecting an annual taxable income of $45,000 for itstax year. It is considering an additional capital investment of $100,000 in anengineering project, which is expected to create an added annual net cash flow (revenues minus expenses) of $35,000 and an added annual depreciation deduction of $20,000. What is the corporation’s federal income tax liability(a) without the added capital investment, (b) with the added capital investment?The XYZ, Inc. reported $50 million of taxable income. Its federal tax rate was 21% (ignore any possible state corporation taxes). What is the company’s federal income tax bill for the year? Question 1 options: a) $11,500,000 b) $10,500,000 c) $12,100,000 d) $11,100,000In the year 2018, a corporation made $20.4 Million in revenue, $2.42 Million of operating expenses, and depreciation expenses of $7.37 Million. The state income tax rate is 1010% and the federal income tax rate is 21%. How much (a) state income tax, and (b) federal income tax will this corporation pay in this tax year? Assume that the state income tax is a tax-deductable expence when filing federal income tax. The approximate state income tax rate is $ The approximate federal tax is $ The combined effective income tax rate is The ATCF for the year 2018 is $ Million (Round to three decimal places.) _Million. (Round to three decimal places.) (Round to the nearest decimal.) Million (Round to three decimal places.)