Question 1 - The tax rates are as shown. Your firm currently has taxable income of $83,200. What are the average and marginal tax rates? How much additional tax will you owe if you increase your taxable income by $24,600?
|
Taxable Income
|
Tax Rate (%)
|
|
$0 - 50,000
|
15
|
|
50,001 -75,000
|
25
|
|
75,001 -100,000
|
34
|
|
100,001 -335,000
|
39
|
For Question 1 use the following financial statements of Woodlands Inc.:
a. What is the change in the net working capital from 2014 to 2015?
b. What is the amount of the non-cash items for 2015?
c. What is the amount of the net capital spending for 2015?
d. What is the operating cash flow for 2015?
e. What is the cash flow of the firm for 2015?
f. What is the cash flow to stockholders for 2015?
g. What is the cash flow to creditors for 2015?
Question 2 - Seven years ago, Carlos took out a 30-year mortgage for $185,000 at 5.6 percent. He has made all of the monthly payments as agreed. What is his current loan balance?
Hint: You would have to first compute what the monthly payment is. Then figure out what the value of the remaining payment is after seven years.
Question 3 - Your employer contributes $50 a week to your retirement plan. Assume you work for your employer for another twenty years and the applicable discount rate is 5 percent, compounded weekly. Given these assumptions, what is this employee benefit worth to you today? Assume each year has 52 weeks.