Question

The table below contains data on Fincorp Inc. The balance sheet items correspond to values at year-end 2015 and 2016, while the Income statement items correspond to revenues or expenses during the year ending in either 2015 of 2016. All values are in thousands of dollars. 2015 $4,000 .600 2016 $4,100 1,700 520 350 550 150 150 400 420 Revenue Cost of goods sold Depreciation Inventories Administrative expenses Interest expense Federal and state taxe Accounts payable Accounts receivable Net fixed assets Long-term debt Notes payable Dividends paid Cash and marketable securiti 350 4ee 5,000 450 5,8ee 2,000 1.ece 2,400 600 410 BA 300 Taxes are paid in their entirety in the year that the tax obligation is incurred Net fixed assets are fixed assets net of accumulated depreciation since the asset was installed, What was the firm's average tax rate for each year? (Enter your answers as a percent rounded to 1 decimal place. 2016 Average tax rate

Answer 1

Income Statement
	2015	2016
Revenue	$                4,000	$                 4,100
Less Costs
Cost of Goods Sold	$                1,600	$                 1,700
Depreciation	$                    500	$                    520
Administrative expenses	$                    500	$                    550
Interest Expense	$                    150	$                    150
Total Costs	$                2,750	$                2,920
Income before tax	$                1,250	$                1,180
Federal and state taxes	$                    400	$                    420
Average tax rate	32.00%	35.59%

Average Tax rate = Federal and state taxes / Income before tax