Financial statement, taxation, and time value of money (1) find the income statement and balance sheet of a public corporation and estimate the following ratios: (a) the current ratio,(b) the total debt ratio, (c) return on equity(ROE), and(d)current ratio. you may decompose the ROE into the Dupont identity (2) suppose a corporation has an annual income of $270,000, what is the marginal tax rate, tax liability, and average rate for a year? ( Corporation is Macys) (3) imagine that you have been asked to make an investment in a project that will cost $150,000 over a four- year period, explain why you will accept or reject the investment if you are expecting the following projected cash flows $30,000, $45,000,$10,000, and $25,000; all discounted to the present at 5%. (4) suppose you invested $100,000 of your company's income at 3%, what will be the value of your investment in 5 years? assuming that interest is paid twice a year, how will the value of your investment change? (5) suppose a bank has offered your company a loan to $25,000 over a period of 5 years, what will be your interest payments if your company has to repay $34,000?

Marginal Corporate Tax Rates

0.50,000, 50,001-75,000, 100,001-335,000, 385,001-10,000,00, 10,000,001-15,000,00, 5,000,001,-18,333,333, >18,333,333 Marginal Tax Rate 0.15, 0.25,0.34,0.39,0.34,0.35,0.38,0.35, Tax liability, MTR,& Average Tax Rate (ATR) corporate payer example: taxable income(TI) =$200,000 (A) corporate tax bracket($) 0.50,000, 50,001-75,000, 75,001-100,000, 100,001-335,000 (B) MTR 0.15, 0.25, 0.34, 0.39 (C) portion of TI ($) 50,000, 25,000, 25,000, 100,000, E $200,000, (D) Tax liability( B*C) 7500, 6250, 8500, 39000, E$61,250 (E) Average Tax Rate ED/EC=TL/TI ED/EC= 30.62%