How much was the firm earnings after taxes

Assignment Help Financial Management

Reference no: EM131943051

1. River Inc. operates as a partnership. Now the partners have decided to convert the business into a corporation. Which of the following statements is CORRECT?

a. The company will probably be subject to fewer regulations and required disclosures.

b. Assuming the firm is profitable, none of its income will be subject to federal income taxes.

c. The firm's investors will be exposed to less liability, but they will find it more difficult to transfer their ownership.

d. River’s shareholders (the ex-partners) will now be exposed to less liability.

2. Stamps Office Supplies recently reported $15,500 of sales, $8,500 of operating costs other than depreciation, and $1,700 of depreciation. It had $10,000 of bonds outstanding that carry a 6.0% interest rate, and its federal-plus-state income tax rate was 35%. How much was the firm's earnings after taxes?

a. $4,700 b. $4,870 c. $1,645 d. $3,055

Reference no: EM131943051

Questions Cloud

How much additional spendable income will each investor : How much additional spendable income will each investor have if the business is organized as a partnership rather than as a corporation?

Switch to the proposed capital structure : What will be the level of expected EPS if they switch to the proposed capital structure?

Forward rate on zero-coupon treasury bonds : Using the unbiased expectations theory, what is the one-year forward rate on zero-coupon Treasury bonds for year four as of May 23, 20XX

Determine the after-tax cost of the debt : Compute yield to maturity and make the appropriate tax adjustment to determine the after-tax cost of the debt.

How much was the firm earnings after taxes : Stamps Office Supplies recently reported $15,500 of sales, $8,500 of operating costs other than depreciation, How much was the firm's earnings after taxes?

Should the investor buy bond from broker at quoted price : What is the present value of the bon. Should the investor buy the bond from the broker at the quoted price?

What was the capital gain of the tips in dollars : At the beginning of this year, the CPI was 197.80 and was at 203.00 at the end of the year. What was the capital gain of the TIPS in dollars?

Maximum price in light of the dividend payment logistics : What will be the expected maximum price in light of the dividend payment logistics?

About the consumer decision making : Provide an example of how you went through all stages of a consumer decision making process and detail the influences that you encountered.

User Account

All Pages