The Analtoly Corporation is an electronics dealer and distributor. Sales for the last year were

$4.5 million, and cost of goods sold was $2 million and operating expenses totaled $1.2

million. Analtoly also paid $150,000 in interest expense, and depreciation expense totaled

$50,000. In addition, the company sold securities for $120,000 that it had purchased 4 years

earlier at a price of $40,000.

a. Compute Taxable Income (5 marks)

b. Compute the tax liability for Analtoly. (5 marks)

Corporate Tax Rates

Taxable Income Corporate Tax Rate

$1 - $50,000 15%

$50,001 - $75,000 25%

$75,001 - $10 million 34%

over $10 million 35% and

$100,000 - $335,000 5% surtax

$15m - $18.333 m 3% surtax

Apply the usual important considerations.

c] Explain objectives of Corporate Financial Management.