Solution-Firm net income and net cash flow

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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Firm net income and net cash flow

Reference no: EM13973879

Reference no: EM13973879

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