Question

Please solve, show work, and give detail explanation

11. The IRR decision rule is unreliable when comparing mutually exclusive projects. a. True b. False 12. Return on Assets (ROA) is an example of a profitability ratio. a. True b. False 13. For a given time period, the higher the interest rate, the smaller the future value. a. True b. False 14. Stockholders' Equity = Assets + Liabilities. a. True b. False 15. A disadvantage of the Average Accounting Return (AAR) rule is the lack of consideration of time value of money. a. True b. False Chapters 2 & 3 Review Problems Nevada Mining currently has taxable income of $97,800. How much additional tax will the firm owe if taxable income increases by $21,000? Taxable Income $0 - $50,000 $50,001 - $75,000 $75,001 - $100,000 $100,001 - $335,000 Tax Rate 15% 25% 34% 39%

Answer 1

1.
True

2.
True

3.
False, higher the rate higher is the future value

4.
False, Equity=Assets-Liabilities

5.
True

6.
=34%*(100000-97800)+(21000-100000+97800)*39%=8080