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Firm net income and net cash flow

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Reference no: EM13973879

Problem 1: A married couple earned $115,000 (in taxable income) in 2014. Use table

Taxable Income (dollars)

Single Taxpayers

Married Taxpayer Filling Joint Returns

Tax Rates, %

0-9,075

0-18,150

10

9,076-36,900

18,151-73,800

15

36,901-89350

73,801-148,350

25

89351-186,350

148,351-226,850

28

186,351-405,100

226851-405,100

33

405,101-406,705

405,101-457,600

35

406,751 and above

457,601 and above

39.6

How much did they pay taxes?

a. What was their marginal tax bracket?

b. What was their average tax bracket?

Problem 2: Butterfly Tractors had $23.50 million in last year. Cost of goods sold was $9.90 million, depreciation expense was $3.90 million, interest payment on outstanding debt was $2.90 million, and the firm's tax rate was 30%.

a. What were the firm's net income and net cash flow?

b. What would happen to net income and cash flow if depreciation were increased by $2.90 million?

Reference no: EM13973879

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