Reference no: EM132746356

The Analtoly Corporation is an electronics dealer and distributor. Sales for the last year were $4.5 million, and cost of goods sold was $2 million and operating expenses totalled $1.2 million. Analtoly also paid $150,000 in interest expense, and depreciation expense totalled $50,000. In addition, the company sold securities for $120,000 that it had purchased 4 years earlier at a price of $40,000.

Problem a. Compute Taxable Income?

Problem b. Compute the tax liability for Analtoly?

Corporate Tax Rates

Taxable Income Corporate Tax Rate

$1 - $50,000                  15%

$50,001 - $75,000        25%

$75,001 - $10 million       34%

over $10 million               35%

$100,000 - $335,000        5% surtax

$15m - $18.333 m       3% surtax

Apply the usual important considerations.

Problem c. Explain objectives of Corporate Financial Management.