What is the firms tax liability and marginal tax rate

Assignment Help Financial Management
Reference no: EM131078088

Suppose your firm earns $250,000 in taxable income.

What is the firm’s tax liability?

What is the average tax rate?

What is the marginal tax rate?

If you are considering a project that will increase the firm’s taxable income by $50,000, which tax rate should you use in your analysis?

What about a flat tax rate?

Reference no: EM131078088

Questions Cloud

Profitability and capital structure analysis : In the year that just ended, Callaway Lighting had sales of $5,470,000 and incurred cost of goods sold equal to $4,460,000. The firm's operating expenses were $128,000 and its increase in retained earnings was $42,000 for the year. There is not enoug..
What is your portfolio dollar return and percentage return : The table below shows your stock positions at the beginning of the year, the dividends that each stock paid during the year, and the stock prices at the end of the year. Company Shares Beginning of Year Price Dividend Per Share End of Year Price John..
Manufactures no-inhale cigarettes : Boomer Products, Inc. manufactures “no-inhale” cigarettes. As their target customers age and pass on, sales of the product are expected to decline. Thus, demographics suggest that earnings and dividends will decline at a rate of 5% (-5%) annually for..
Market value analysis : Lei Materials' balance sheet lists total assets of $1.16 billion, $132 million in current liabilities, $415 million in long-term debt, $613 million in common equity, and 58 million shares of common stock. If Lei's current stock price is $52.08, what ..
What is the firms tax liability and marginal tax rate : Suppose your firm earns $250,000 in taxable income. What is the firm’s tax liability? What is the average tax rate? What is the marginal tax rate?
What is the value per share of your firms stock : Your company has a required rate of return 7%. The company has completed a new project that is expected to grow dividends at a rate of 50% the first year and 25% the following year, after which growth should be at a constant rate of 6%. The last divi..
About the liquidity analysis : Airspot Motors, Inc. has $2,433,200 in current assets and $869,000 in current liabilities. The company's managers want to increase the firm's inventory, which will be financed using short-term debt. How much can the firm increase its inventory withou..
Current yield on your bond investment at time of purchase : Assume you purchased a high-yield corporate bond at its current market price of $925 on January 2, 2004. It pays 6.75 percent interest and it will mature on December 31, 2013, at which time the corporation will pay you the face value of $1,000. (a) D..
Distributors of servers and video-conferencing technology : United Systems is one of the country’s largest distributors of servers and video-conferencing technology. Recently, the company successfully expanded into three new markets. Comparing the company’s actual sales volume in the new markets to the compan..

Reviews

Write a Review

Financial Management Questions & Answers

  Find payoff of interest rate call option on annual rate

Find the payoff of an interest rate call option on the annual rate with an exercise rate of 10 percent if the one-period rate at expiration is 11 percent.

  What is the variance of the returns on rtf

If the economy booms, RTF, Inc. stock is expected to return 10 percent. If the economy goes into a recessionary period, then RTF is expected to only return 2 percent. The probability of a boom is 66 percent while the probability of a recession is 34 ..

  Forecast are often related to sales because

Which of the following is not a source of a short term debt? An example of systematic risk is when the company's value decline to. Forecast are often related to sales because

  Various trading strategies appear to offer non-zero alphas

Various trading strategies appear to offer non-zero alphas when we examine real world data. If indeed these alphas are positive, it could be explained by any of the following except:

  Ratio analysis for government financial condition analysis

What general problems must be addressed in doing ratio analysis for government financial condition analysis? Do traditional solvency ratios adequately address financial condition analysis concerns? Provide your responses supported by text and other r..

  Annual operating cash flow

Bottoms Up Diaper Service is considering the purchase of a new industrial washer. It can purchase the washer for $7,200 and sell its old washer for $2,100. If the firm uses straight-line depreciation to an assumed salvage value of zero over a 6-year ..

  Not exercise the option and what would be your gain or loss

You have purchased a call option contract on Smith & Smith common stock. The option contract is for 100 shares. The option has an exercise price of $43.00 and S & S’s stock currently trades at $40.00. The option premium is quoted at $2.00. If the sto..

  Amount of the firms after-tax cash flow from operations

Moby Dick Corporation has sales of 4,912,720; income tax of 503,624; the selling, general and administrative expenses of 274,579; depreciation of 397,181; cost of goods sold of 2,639,530; and interest expense of 123,651. Calculate the amount of the f..

  Unified tax credit and unified transfer tax rates

Valdez dies in 2015, leaving a taxable estate of $6,400,000. In 2007, he made a taxable gift of $300,000 upon which he paid no tax due to the availability of the unified tax credit. Compute Valdez’s estate tax. Click to access Exhibit 18-1, Unified T..

  An inverted yield curve means that

An inverted yield curve means that:

  Federal reserve tightens credit and firm uses more debt

How would each of the following scenarios affect a firm's cost of debt Rd(1-T), its cost of equity, Rs, and its WACC? Indicate with a plus(+), a minus (-) or a zero (0) if the factor would raise, would lower or would have an undeterminable effect on ..

  The future potential of the stock warrants the price

Choose a stock that is publicly traded and explain how you think the future potential of the stock warrants the price it sells at today – please explain and support with terms and concepts from this class material?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd