Economy fundamental.docxVIP

A firm has common stock of $110, paid-in surplus of $220, total liabilities of $360, current assets of $440, and Corporation?s of $630. What is the amount of the shareholders equity?$710$1,260$930$1,180$980Shareholders equity = $440 + $630 - $360 = $710 (Note: The amount of retained earnings is not provided, so you must use total assets minus total liabilities to derive the correct answer.)Jensen Enterprises paid $420 in dividends and $605 in interest this past year. Common stock increased by $235 and retained earnings decreased by $80. What is the net income for the year?$340$420$605$840$945Net income = $420 + (-$80) = $340The tax rates are as shown.Taxable IncomeTax Rate$0 - 50,00015%50,001 - 75,00025%75,001 - 100,00034%100,001 - 335,00039%?What is the average tax rate for a firm with taxable income of $161,222?28.25 percent20.00 percent28.61 percent39.00 percent36.66 percentTax = .15($50,000) + .25($25,000) + .34($25,000) + .39($61,222) = $46,126.58 Average tax rate = $46,126.58 / $161,222 = 28.61 percentThe tax rates are as shown.Taxable IncomeTax Rate$0 - 50,00015%50,001 - 75,00025%75,001 - 100,00034%100,001 - 335,00039%? Nevada Mining currently has taxable income of $81,400. How much additional tax will the firm owe if taxable income increases by $22,200?$7,728$7,743$6,333$7,548$6,324Additional tax = .34($100,000 - $81,400) + .39($81,400 + $22,200 - $100,000) = $7,728Crandall Oil has total sales of $1,280 and costs of $735. Depreciation is $151 and the tax rate is 33 percent. The firm does not have any interest expense. What is the operating cash flow?$390$420$415$440$405Earnings before interest and taxes = $1,280 - $735 - $151 = $394 Tax = $394 × .33 = $130 Operating cash flow = $394 + $151 - $130 = $415Nielsen Auto Parts had beginning net fixed assets of $490 and ending net fixed assets of $537. Assets valued at $331 were sold. Depreciation for the year was $36. What is the amount of net capital spending?$414$47$83$242$11Net capital spending = $537 - $490 +