provide the solutions for the problems in the attached file. Thanks

Question 1 The tax rates are as shown. Your firm currently has taxable income of $83,200. What are the average and marginal tax rates? How much additional tax will you owe if you increase your taxable income by $24,600? Taxable Income $0 - 50,000 50,001 -75,000 75,001 -100,000 100,001 -335,000 Tax Rate (%) 15 25 34 39 For Question 1 use the following financial statements of Woodlands Inc.: a. What is the change in the net working capital from 2014 to 2015? b. What is the amount of the non-cash items for 2015? c What is the amount of the net capital spending for 2015? d What is the operating cash flow for 2015? e What is the cash flow of the firm for 2015? f What is the cash flow to stockholders for 2015? g What is the cash flow to creditors for 2015? 2) Seven years ago, Carlos took out a 30-year mortgage for $185,000 at 5.6 percent. He has made all of the monthly payments as agreed. What is his current loan balance? Hint: You would have to first compute what the monthly payment is. Then figure out what the value of the remaining payment is after seven years. 3) Your employer contributes $50 a week to your retirement plan. Assume you work for your employer for another twenty years and the applicable discount rate is 5 percent, compounded weekly. Given these assumptions, what is this employee benefit worth to you today? Assume each year has 52 weeks. Question 1 The tax rates are as shown. Your firm currently has taxable income of $83,200. What are the average and marginal tax rates? How much additional tax will you owe if you increase your taxable income by $24,600? Taxable Income $0 - 50,000 50,001 -75,000 75,001 -100,000 100,001 -335,000 Tax Rate (%) 15 25 34 39 Answer: Current taxable income = Taxable income 0 to 50000 50001 - 75000 75-001 - 100000 Tax If amount increase by 24600 New taxable income = Taxable income 0 to 50000 50001 - 75000 75-001 - 100000 100001-335000 Taxable income 83200 Tax Amount * rate 50000 * 15% 24999 *25% 8199 * 34% = = = = Tax amount 7500 6249.75 2787.66 16537.4 = = = = = Tax amount 7500 6249.75 8499.66 3041.61 25291 107800 Tax Amount * rate 50000 *15% 24999 *25% 24999 *34% 7799 *39% For Question 1 use the following financial statements of Woodlands Inc.: a. What is the change in the net working capital from 2014 to 2015? Current Assets Current liabilities Working capital Change in net working capital 2015 2160 686 1474 =1427-1323 2014 1936 613 1323 Change in net working capital =151 b. What is the amount of the non-cash items for 2015? Depreciation Non cash item = 311 311 c What is the amount of the net capital spending for 2015? Ending Add: Depreciation Less: Beginnning Capital spending 2290 311 2290 311 d What is the operating cash flow for 2015? EBIT Add: Depreciation Less: Taxes Operating cash flow 634 311 162 783 e What is the cash flow of the firm for 2015? Cash flow of the firm 295 f What is the cash flow to stockholders for 2015? Cash flow from stockholders Dividends paid Less: Ending common stock, additional paid inc apital and treasury stock beginning) Cash flow from stockholders 75 0 75 g What is the cash flow to creditors for 2015? Cash flow from creditors Interest paid Net new borrowing Cash flow from creditors 170 50 220 2) Seven years ago, Carlos took out a 30-year mortgage for $185,000 at 5.6 percent. He has made all of the monthly payments as agreed. What is his current loan balance? Hint: You would have to first compute what the monthly payment is. Then figure out what the value of the remaining payment is after seven years. 185000 = P*(1-(1+5.6%/12)^-30*12)/(5.6%/12) Solving for P P = 1062.05 Current loan balance Using excel function =-CUMPRINC(5.6%/12,30*12,185000,1,84,0) = 20378 Outstanding amount = 185000-20378 = 164621 3) Your employer contributes $50 a week to your retirement plan. Assume you work for your employer for another twenty years and the applicable discount rate is 5 percent, compounded weekly. Given these assumptions, what is this employee benefit worth to you today? Assume each year has 52 weeks. Answer: PV = 50*(1-(1+5%/52)^-50*12)/(5%/52) = 32861.08 Question 1 The tax rates are as shown. Your firm currently has taxable income of $83,200. What are the average and marginal tax rates? How much additional tax will you owe if you increase your taxable income by $24,600? Taxable Income $0 - 50,000 50,001 -75,000 75,001 -100,000 100,001 -335,000 Tax Rate (%) 15 25 34 39 Answer: Current taxable income = Taxable income 0 to 50000 50001 - 75000 75-001 - 100000 Tax If amount increase by 24600 New taxable income = Taxable income 0 to 50000 50001 - 75000 75-001 - 100000 100001-335000 Taxable income 83200 Tax Amount * rate 50000 * 15% 24999 *25% 8199 * 34% = = = = Tax amount 7500 6249.75 2787.66 16537.4 = = = = = Tax amount 7500 6249.75 8499.66 3041.61 25291 107800 Tax Amount * rate 50000 *15% 24999 *25% 24999 *34% 7799 *39% For Question 1 use the following financial statements of Woodlands Inc.: a. What is the change in the net working capital from 2014 to 2015? Current Assets Current liabilities Working capital Change in net working capital 2015 2160 686 1474 =1427-1323 2014 1936 613 1323 Change in net working capital =151 b. What is the amount of the non-cash items for 2015? Depreciation Non cash item = 311 311 c What is the amount of the net capital spending for 2015? Ending Add: Depreciation Less: Beginnning Capital spending 2290 311 2290 311 d What is the operating cash flow for 2015? EBIT Add: Depreciation Less: Taxes Operating cash flow 634 311 162 783 e What is the cash flow of the firm for 2015? Cash flow of the firm 295 f What is the cash flow to stockholders for 2015? Cash flow from stockholders Dividends paid Less: Ending common stock, additional paid inc apital and treasury stock beginning) Cash flow from stockholders 75 0 75 g What is the cash flow to creditors for 2015? Cash flow from creditors Interest paid Net new borrowing Cash flow from creditors 170 50 220 2) Seven years ago, Carlos took out a 30-year mortgage for $185,000 at 5.6 percent. He has made all of the monthly payments as agreed. What is his current loan balance? Hint: You would have to first compute what the monthly payment is. Then figure out what the value of the remaining payment is after seven years. 185000 = P*(1-(1+5.6%/12)^-30*12)/(5.6%/12) Solving for P P = 1062.05 Current loan balance Using excel function =-CUMPRINC(5.6%/12,30*12,185000,1,84,0) = 20378 Outstanding amount = 185000-20378 = 164621 3) Your employer contributes $50 a week to your retirement plan. Assume you work for your employer for another twenty years and the applicable discount rate is 5 percent, compounded weekly. Given these assumptions, what is this employee benefit worth to you today? Assume each year has 52 weeks. Answer: PV = 50*(1-(1+5%/52)^-50*12)/(5%/52) = 32861.08