Question

Note: Show all of your work to arrive at a final result. Use periodic interest factors in the calculation of NPV and IRR. 1. At the end of a tax year, a company has the following data: Gross receipts (sales) $300,000 Cost of goods sold $50,000 Tax depreciation $15,000 Book depreciation $8,000 Interest on debt $10,000 What is the company's tax liability (tax) and effective tax rate? 2. For the net cash flows given below, determine the following: (a) The net present value if MARR equals 15%. (b) The internal rate of return. (c) The payback period. End of Year 6 DOWN Net Cash Flow -20,000 -20,000 -20,000 -20,000 45,000 20,000 10,000 20,000 20,000 20,000 20,000

Answer 1

Answer fvomm data Given Collect The tet us euation That The assome Jata as filoued Nouo ne haue to Considcu hc The company's tar liabilihy Cton) and elfective tan vae NOw Cormpang's ta Liabi lity: GoA pvofit -gros 'receipts- cotd of gool sold 50,000 aso00 o 300, 00 0 Gro a profit is aro,o00 Expense = 1S0oo +8000t 0,000 = 33000 .The Expense is 33, 00o ros pnht - erpenyya ro, o00-33,000- 2rac00 liability Tax E Hecrve tan Inome tan euPenp Earninga before fan 15000tlo0o0 38 300 0 = 6.SI .effechve tox Lak is 6.5. THE END