Airbus

Topics: Balance sheet, Generally Accepted Accounting Principles, Liability Pages: 14 (2537 words) Published: October 4, 2014
1. Income statement
Molteni Motors Inc. recently reported $3.25 million of net income. Its EBIT was $7.75 million, and its tax rate was 35%. What was its interest expense? Round your answer to the nearest dollar. Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000. $  

2. Corporate Tax Liability
To complete the assignments listed below, refer to the Table 2-1.

The Talley Corporation had a taxable income of $300,000 from operations after all operating costs but before (1) interest charges of $30,000, (2) dividends received of $18,000, (3) dividends paid of $18,000, and (4) income taxes. What are the firm's income tax liability and its after-tax income? Round your answers to two decimal places. Income tax liability

$  
After-tax income
$  
What are the company's marginal and average tax rates on taxable income? Round your answers to two decimal places. Marginal tax rate
 %
Average tax rate
 %

3. Balance Sheet Analysis
Complete the balance sheet and sales information in the table that follows for J. White Industries using the following financial data: Total assets turnover: 2.1
Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 24%  Total liabilities-to-assets ratio: 35%
Quick ratio: 1.05 
Days sales outstanding (based on 365-day year): 36 days 
Inventory turnover ratio: 3.0
Round your answers to the nearest whole dollar.
Partial Income 
Statement
Information
Sales
$  
Cost of goods sold
$  
Balance Sheet
Cash
$  
Accounts payable
$  
Accounts receivable
$  
Long-term debt
$  50,000
Inventories
$  
Common stock
$  
Fixed assets
$  
Retained earnings
$  100,000
Total assets
$  400,000
Total liabilities and equity
$  

4. PV and Effective Annual Rate
Assume that you inherited some money. A friend of yours is working as an unpaid intern at a local brokerage firm, and her boss is selling securities that call for 4 payments of $50 (1 payment at the end of each of the next 4 years) plus an extra payment of $1,000 at the end of Year 4. Your friend says she can get you some of these securities at a cost of $950 each. Your money is now invested in a bank that pays an 12% nominal (quoted) interest rate but with quarterly compounding. You regard the securities as being just as safe, and as liquid, as your bank deposit, so your required effective annual rate of return on the securities is the same as that on your bank deposit. You must calculate the value of the securities to decide whether they are a good investment. What is their present value to you? Round your answer to the nearest cent. $  

5. Amortization Schedule
a. Set up an amortization schedule for a $15,000 loan to be repaid in equal installments at the end of each of the next 5 years. The interest rate is 12%. Round your answers to the nearest cent. Enter "0" if required  

Year
Payment
Repayment Interest
Repayment of Principal
Balance
1
$  
$  
$  
$  
2
$  
$  
$  
$  
3
$  
$  
$  
$  
4
$  
$  
$  
$  
5
$  
$  
$  
$  
Total
$  
$  
$  

b. How large must each annual payment be if the loan is for $30,000? Assume that the interest rate remains at 12% and that the loan is paid off over 5 years. Round your answer to the nearest cent. $   

c. How large must each payment be if the loan is for $30,000, the interest rate is 12%, and the loan is paid off in equal installments at the end of each of the next 10 years? This loan is for the same amount as the loan in part b, but the payments are spread out over twice as many periods. Round your answer to the nearest cent. $   

Why are these payments not half as large as the payments on the loan in part b?  
I. Because the payments are spread out over a longer time period, less interest is paid on the loan, which raises the amount of each payment.  II. Because the payments are spread out over a longer time period, less interest is paid on the loan, which lowers the...
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