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CHAPTER 2: PROBLEM 1 Current Assets $7,300 Net Fixed Assets $26,200 Current Liabilities $5,700 Long-Term Debt $12,900 Shareholder Equity = Net Working Capital = CHAPTER
| CHAPTER 2: PROBLEM 1 | |||||||||
| Current Assets | $7,300 | ||||||||
| Net Fixed Assets | $26,200 | ||||||||
| Current Liabilities | $5,700 | ||||||||
| Long-Term Debt | $12,900 | ||||||||
| Shareholder Equity = | |||||||||
| Net Working Capital = | |||||||||
| CHAPTER 2: PROBLEM 2 | |||||||||
| Income Statement | |||||||||
| Sales | $675,300 | ||||||||
| Costs | $297,800 | ||||||||
| Depreciation Expense | $45,100 | ||||||||
| EBIT | |||||||||
| Interest Expense | $20,700 | ||||||||
| EBT | |||||||||
| Taxes @ 35% | |||||||||
| Net Income = | |||||||||
| Cash Dividends | $62,000 | ||||||||
| Addition to Retained Earnings = | |||||||||
| Tax Rate = | 35% | ||||||||
| CHAPTER 2: PROBLEM 4 | |||||||||
| Taxable Income | $315,000 | ||||||||
| Table 2.3 | |||||||||
| Taxable Income | Taxable Income (cont) | Tax Rate | |||||||
| 0 | 50,000 | 15% | |||||||
| 50,001 | 75,000 | 25% | |||||||
| 75,001 | 100,000 | 34% | |||||||
| 100,001 | 335,000 | 39% | |||||||
| 335,001 | 10,000,000 | 34% | |||||||
| 10,000,001 | 15,000,000 | 35% | |||||||
| 15,000,001 | 18,333,333 | 38% | |||||||
| 18,333,334 | + | 35% | |||||||
| Income Taxes = | |||||||||
| Average Tax Rate = | |||||||||
| Marginal Tax Rate = | (Note: No formula needed. Just input the correct rate from the Tax Rate column.) | ||||||||
| CHAPTER 2: PROBLEM 5 | |||||||||
| Sales | $29,200 | ||||||||
| Costs | $10,400 | ||||||||
| Depreciation Expense | $1,800 | ||||||||
| EBIT | |||||||||
| Interest Expense | $1,050 | ||||||||
| EBT | |||||||||
| Taxes @ 40% | |||||||||
| Net Income | |||||||||
| Tax Rate | 40% | ||||||||
| Operating Cash Flow = | |||||||||
| CHAPTER 3: PROBLEM 2 | |||||||||
| Debt/Equity Ratio | 0.65 | ||||||||
| Return on Assets | 9.80% | ||||||||
| Total Equity | $850,000 | ||||||||
| Equity Multiplier = | |||||||||
| Return on Equity = | |||||||||
| Net Income = | |||||||||
| CHAPTER 3: PROBLEM 6 | |||||||||
| ROE | 16% | ||||||||
| Payout Ratio | 25% | ||||||||
| Retention Ratio | (Note: You must calculate the retention ratio first then the sustainable growth rate.) | ||||||||
| Sustainable Growth Rate = | |||||||||
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