BA350 Week 8 Final Assignment A+ Promised

Feb 3rd, 2012
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Course: BA350
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BA350 Week 8 Final Assignment A+ Promised

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Chapter 22-4 The taxable income would be 7.5 less 2 million less depreciation and amortization. so 5.5-1.8 is the total available to pay taxes and depreciation. So you have 370,000 to pay depreciation and taxes. So depreciation will be 250K leaving taxes on 200K of 120K3.7-Depr= (5.5-Depr)*40%3.7-2.5= (5.5-2.5)*40% (2.0)*40%=1.2Proof=5,500,000 EBITDA(2,000,000) Interest(2,500.000)Depreciation & Amortization3,000,000 Taxable(1,200,000) Tax1.800,000 Profit2-7Income $365,000Less Interest deduction (50,000)Plus: Dividends received 4,500Taxable income $319,50070% of dividends received are excluded from taxes = $15,000(1 - 0.70) = $4,500.Tax = $22,250 + ($319,500 - $100,000)*0.39Tax= $22,250 + $85,605 = $107,855.After-tax income:Taxable income $319,500Taxes (107,855)Plus Non-taxable dividends received 10,500Net income $222,145Non-taxable dividends: $15,000 x 0.7 = $10,500.Marginal tax rate is 39 percentAverage tax rate is $107,855/$319,500 = 33.76%.Chapter 33-8Return on assets = Profit margin x Assets turnover .03 = profit margin x 1.5.03/1.5 = .02 or 2 percent therefore profit margin = 2 percentReturn on assets / Return on equity = .03/.05 = 0.6 or 60 percent of total assets is from equity, therefore debt = Assets - equity = 1-0.6 = 0.4 or 40 percent therefore debt ratio =40 %3-10Net profit margin = Profit after tax = 2,000,000 x.05 = 100,000Then Profit before tax = XHere X = (1-t) of X = 70 percent of X = 100,000Therefore X = 100,000/.70

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