Homework Answers
Computation of the appropriate tax rate be for use in the calculation of the debt component of LilyMac’s WACC
Tax rate to use is the average tax rate.
Taxable income = EBIT - interest expense
Interest expense = bonds outstanding * face value per bond * coupon rate
interest expense = 300 * $1,000 * 4% = $12,000
Taxable income = EBIT - interest expense
Taxable income = $70,000 - $12,000
Taxable income = $58,000
The appropriate tax rate to be used for calculation of the debt component of Lily Mac's WACC would be 25% as the taxable income of $58,000 lies in the tax slab of 25%
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Problem 11-5 Tax Rate (LG11-3) Suppose that LilyMac Photography expects EBIT to be approximately $70,000 per...
PDQ, Inc. expects EBIT to be approximately $11 million per year for the foreseeable future, and that it has 25,000 20-ye...
PDQ, Inc. expects EBIT to be
approximately $11 million per year for the foreseeable future, and
that it has 25,000 20-year, 8 percent annual coupon bonds
outstanding. (Use Table 11.1.)
What would the appropriate tax rate be for use in the calculation
of the debt component of PDQ’s WACC?
table 11.1 Corporate Tax Rates Tax Rat Taxable Income $0 - $50,000 50,001 - 75,000 15% 75,001 100,000 100,001 - 335,000 335,001 - 10,000,000 10,000,001 - 15,000,001 - 15,000,000 18,333,333 38...
PDQ, Inc. expects EBIT to be approximately $13.3 million per year for the foreseeable future, and it has 40,000 20-year,...
PDQ, Inc. expects EBIT to be approximately $13.3 million per year for the foreseeable future, and it has 40,000 20-year, 10 percent annual coupon bonds outstanding. (Use Table 11.1.) What would the appropriate tax rate be for use in the calculation of the debt component of PDQ’s WACC? (Round your answer to 2 decimal places.) Tax Rate: ______.__% table 11.1 Corporate Tax Rates Taxable Income Tax Rate $0 - $50,000 15% 50,001 - 75,000 25 75,001 100,000 100,001 335,000 335,001...
The Anberlin Co. had $272194 in 2015 taxable income. Use the tax rates from Table 2.3....
The Anberlin Co. had $272194 in 2015 taxable income. Use the tax rates from Table 2.3. Calculate the company’s marginal tax rate. Taxable Income Tax rate $0-50,000 15% 50,001-75,000 25% 75,001-100,000 34% 100,001-335,000 39% 335,001-10,000,000 34% 10,000,001-15,000,000 35% 15,000,001-18,333,333 38% 18,333,334 + 35%
The Anberin Co. had $280925 in 2015 taxable income. Use the tax rates from Table 2.3....
The Anberin Co. had $280925 in 2015 taxable income. Use the tax rates from Table 2.3. Calculate the company's average tax rate. TABLE 2.3 Taxable Income Tax Rate Corporate Tax Rates 50,000 75,000 100,000 100,001-335,000 335,001-10,000,000 10,000,001-15,000,000 15,000,001-18,333,333 15% 25 34 39 34 35 38 35 50,001 75,001 18,333,334+
please show all work 4. Calculating Taxes The Alexander Co. had $328,500 in taxable income. Using...
please show all work
4. Calculating Taxes The Alexander Co. had $328,500 in taxable income. Using the rates from Table 2.3 in the chapter, calculate the company's income taxes. What is the average tax rate? What is the marginal tax rate? TAX RATE 15% 25 34 39 TAXABLE INCOME 0-50,000 50,001-75,000 75,001-100,000 100,001-335,000 335,001-10,000,000 10,000,001-15,000,000 15,000,001-18,333,333 34 35 38 35 18,333,334+
The SGS Co. had $311,000 in taxable income. Use the rates from Table 2.3. (Do not...
The SGS Co. had $311,000 in taxable income.
Use the rates from Table 2.3. (Do not round intermediate
calculations and round your answer to the nearest whole number,
e.g., 32.)
Calculate the company’s income taxes.
Tax Rate TABLE 2.3 Corporate tax rates Taxable income 50,000 50,001 75,000 75,001 100,000 100,001 335,000 335,001- 10,000,000 10,000,001– 15,000,000 15,000,001– 18,333,333 18,333,334+ 15% 25 34 39 34 35 38 35
"Florida Citrus Inc. (FCI) estimates its taxable income at $7,100,000. Use the Corporate Tax Schedule, Table...
"Florida Citrus Inc. (FCI) estimates its taxable income at
$7,100,000. Use the Corporate Tax Schedule, Table 9.12, to
calculate how much FCI will pay in federal income taxes."
TABLE 9·12 Corporate Tax Schedule for 2015 Taxable Income (X) $0-$50,000 50,001-75,000 75,001-100,000 100,001-335,000 335,001-10,000,000 10,000,001-15,000,000 15,000,001-18,333,333 18,333,334 and up Tax Rate 15% 25% 34% 34% + 5% 34% 35% 35% + 3% 35% Tax Computation Formula $0 + 0.15X 7,500 + 0.25(X - $50,000) 13,750 + 0.34(X - 75,000) 22,250 +...
The SGS Co. had $120,000 in taxable income. Use the rates from Table 2.3. What is...
The SGS Co. had $120,000 in taxable income. Use the rates from Table 2.3. What is the average tax rate? (Do not round intermediate calculations and enter your answer as a percent rounde Average tax rate What is the marginal tax rate? (Enter your answer as a percent rounded to the nearest whole number, e.g., 32.) Marginal tax rate Taxable Income Tax Rato 0 50,000 75,000 75,001- 100,000 15% 25 34 39 34 35 38 35 50,001 100,001 335,000 335,001-...
Marginal Tax Rate Taxable Income Portion Subject to That Rate 15% 0–$50,000 25% $50,001–$75,000 34% $75,001–$100,000...
Marginal Tax Rate
Taxable Income Portion Subject to That Rate
15%
0–$50,000
25%
$50,001–$75,000
34%
$75,001–$100,000
39%
$100,001–$335,000
34%
$335,001–$10,000,000
35%
$10,000,001–$15,000,000
38%
$15,000,001–$18,333,333
35%
$18,333,333+
(4 of 10 Using the tax table provided in Figure 10.3, determine the average and marginal tax rates for a company that earned $18.5 million in taxable income. Average rate = 35.00%; Marginal rate = 35.00% Average rate = 38.00%; Marginal rate = 34.68% Average rate = 34.68%; Marginal rate = 35.00% Average rate...
The Anberin Co. had $305319 in 2015 taxable income. Use the tax rates from Table 2.3....
The Anberin Co. had $305319 in 2015 taxable income. Use the tax rates from Table 2.3. Calculate the company's marginal tax rate TABLE 2.3 Taxable Income Corporate Tax Rates 50,000 75,000 100,000 100,001335,000 335,001-10,000,000 10,000,001-15,000,000 15,000,001-18,333,333 15% 25 34 39 34 35 38 35 50,001 75,001 18,333,334+
PDQ, Inc. expects EBIT to be
approximately $11 million per year for the foreseeable future, and
that it has 25,000 20-year, 8 percent annual coupon bonds
outstanding. (Use Table 11.1.)
What would the appropriate tax rate be for use in the calculation
of the debt component of PDQ’s WACC?
table 11.1 Corporate Tax Rates Tax Rat Taxable Income $0 - $50,000 50,001 - 75,000 15% 75,001 100,000 100,001 - 335,000 335,001 - 10,000,000 10,000,001 - 15,000,001 - 15,000,000 18,333,333 38...
The Anberin Co. had $280925 in 2015 taxable income. Use the tax rates from Table 2.3. Calculate the company's average tax rate. TABLE 2.3 Taxable Income Tax Rate Corporate Tax Rates 50,000 75,000 100,000 100,001-335,000 335,001-10,000,000 10,000,001-15,000,000 15,000,001-18,333,333 15% 25 34 39 34 35 38 35 50,001 75,001 18,333,334+
please show all work
4. Calculating Taxes The Alexander Co. had $328,500 in taxable income. Using the rates from Table 2.3 in the chapter, calculate the company's income taxes. What is the average tax rate? What is the marginal tax rate? TAX RATE 15% 25 34 39 TAXABLE INCOME 0-50,000 50,001-75,000 75,001-100,000 100,001-335,000 335,001-10,000,000 10,000,001-15,000,000 15,000,001-18,333,333 34 35 38 35 18,333,334+
The SGS Co. had $311,000 in taxable income.
Use the rates from Table 2.3. (Do not round intermediate
calculations and round your answer to the nearest whole number,
e.g., 32.)
Calculate the company’s income taxes.
Tax Rate TABLE 2.3 Corporate tax rates Taxable income 50,000 50,001 75,000 75,001 100,000 100,001 335,000 335,001- 10,000,000 10,000,001– 15,000,000 15,000,001– 18,333,333 18,333,334+ 15% 25 34 39 34 35 38 35
"Florida Citrus Inc. (FCI) estimates its taxable income at
$7,100,000. Use the Corporate Tax Schedule, Table 9.12, to
calculate how much FCI will pay in federal income taxes."
TABLE 9·12 Corporate Tax Schedule for 2015 Taxable Income (X) $0-$50,000 50,001-75,000 75,001-100,000 100,001-335,000 335,001-10,000,000 10,000,001-15,000,000 15,000,001-18,333,333 18,333,334 and up Tax Rate 15% 25% 34% 34% + 5% 34% 35% 35% + 3% 35% Tax Computation Formula $0 + 0.15X 7,500 + 0.25(X - $50,000) 13,750 + 0.34(X - 75,000) 22,250 +...
The SGS Co. had $120,000 in taxable income. Use the rates from Table 2.3. What is the average tax rate? (Do not round intermediate calculations and enter your answer as a percent rounde Average tax rate What is the marginal tax rate? (Enter your answer as a percent rounded to the nearest whole number, e.g., 32.) Marginal tax rate Taxable Income Tax Rato 0 50,000 75,000 75,001- 100,000 15% 25 34 39 34 35 38 35 50,001 100,001 335,000 335,001-...
Marginal Tax Rate
Taxable Income Portion Subject to That Rate
15%
0–$50,000
25%
$50,001–$75,000
34%
$75,001–$100,000
39%
$100,001–$335,000
34%
$335,001–$10,000,000
35%
$10,000,001–$15,000,000
38%
$15,000,001–$18,333,333
35%
$18,333,333+
(4 of 10 Using the tax table provided in Figure 10.3, determine the average and marginal tax rates for a company that earned $18.5 million in taxable income. Average rate = 35.00%; Marginal rate = 35.00% Average rate = 38.00%; Marginal rate = 34.68% Average rate = 34.68%; Marginal rate = 35.00% Average rate...
The Anberin Co. had $305319 in 2015 taxable income. Use the tax rates from Table 2.3. Calculate the company's marginal tax rate TABLE 2.3 Taxable Income Corporate Tax Rates 50,000 75,000 100,000 100,001335,000 335,001-10,000,000 10,000,001-15,000,000 15,000,001-18,333,333 15% 25 34 39 34 35 38 35 50,001 75,001 18,333,334+
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