2. Montgomery Enterprises, Inc., had operating earnings of $280,000 for the year just ended. During the year the firm sold stock that it held in another company for $180,000, which was $30,000 above its original purchas price of $150,000, paid 1 year earlier. a. What is the amount, if any, of capital gains realized during the year? b. How much total taxable income did the firm earn during the year? c. Use the corporate tax rate schedule given in Table 3.4 to calculate the firm's total taxes due. d. Calculate both the average tax rate and the marginal tax rate based upon your findings. ag.220 Capitulo S preadsheet Exercise Leccion IV. At the end of 2015, Uma Corporation is considering undertaking a major long-term project in an effort to remain competitive in its industry. The production and sales departments have determined the potential annual cash flow savings that could accrue to the firm if it acts soon. Specifically, they estimate that a mixed stream of future cash flow savings will occur at the end of the years 2016 through 2021. The years 2022 through 2026 will see consecutive and equal cash flow savings at the end of each year. The firm estimates that its discount rate over the first 6 years will be 7%. The expected discount rate over the years 2022 through 2026 will be 1 196. The project managers will find the project acceptable if it results in present cash flow savings of at least $860,000. The following cash flow savings data are supplied to the finance department for analysis. End of year Cash flow savings 2016 110,000.00 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 120,000.00 130,000.00 150,000.00 160,000.00 150,000.00 90,000.00 90,000.00 90,000.00 90,000.00 90,000.00 Create spreadsheets similar to Table 5.2, and then answer the following questions. a. Determine the value (at the beginning of 2016) of the future cash Sow savings expected to be generated by this project b. Based solely on the one criterion set by management, should the firm undertake this specific project? Explain. c. What is the "interest rate risk," and how might it infuence the recommendation made in part b? Explain Discount rate for years 2016-2021 Discount rate for years 2022-2026 7% 11%