1. A firm's taxable income is $12M; calculate tax expense. (Atax table follows.) (a) $4,100,000 (b) $4,088,250 (c) $5,100,000(d) $5,088,250 Taxable Income Rate Taxable Income Rate $0-$50K 15%>$335K-10M 34% >$50K-$75K 25% >$10M-151/3M 35%>$75K-$100K 34% >151/3M-$18M 38% >$100K-$335K 39% >$18M35%
2. Various stakeholders in a firm care more about: (a) the bookvalue of the firmâs assets, (b) the mar-ket value of the firmâsassets, or (c) how new the assets are.
3. Assume you deposit $25,000 in a corporate bond fund that pays3%. What will value or how much money will you have in this mutualfund in 3 years?
(a) $26,250.24 (b) $26,010.13 (c) $27,318.18 (d) 28,137.72 4.Which of the following statements is most true? (NI = net income;CF = cash flow)
a) NI and CF are totally unconnected, and investors care moreabout NI.
b) NI and CF are certainly positively related, but investorscare more about NI.
c) NI and CF are totally unconnected, and investors care moreabout CF. d) NI and CF are certainly positively related, butinvestors care more about CF.
5. Holding all else constant, the future value of an investmentwill increase if:
(a) the investmentâs expected future cash flows involve more, asopposed to less, uncertainty.
(b) the investment is compounded for a larger, as opposed to asmaller, number of periods.
(c) the investment is compounded at a higher, as opposed to alower, interest rate. (d) both b and c.
1. A firm's taxable income is $12M; calculate tax expense. (Atax table follows.) (a) $4,100,000 (b) $4,088,250 (c) $5,100,000(d) $5,088,250 Taxable Income Rate Taxable Income Rate $0-$50K 15%>$335K-10M 34% >$50K-$75K 25% >$10M-151/3M 35%>$75K-$100K 34% >151/3M-$18M 38% >$100K-$335K 39% >$18M35%
2. Various stakeholders in a firm care more about: (a) the bookvalue of the firmâs assets, (b) the mar-ket value of the firmâsassets, or (c) how new the assets are.
3. Assume you deposit $25,000 in a corporate bond fund that pays3%. What will value or how much money will you have in this mutualfund in 3 years?
(a) $26,250.24 (b) $26,010.13 (c) $27,318.18 (d) 28,137.72 4.Which of the following statements is most true? (NI = net income;CF = cash flow)
a) NI and CF are totally unconnected, and investors care moreabout NI.
b) NI and CF are certainly positively related, but investorscare more about NI.
c) NI and CF are totally unconnected, and investors care moreabout CF. d) NI and CF are certainly positively related, butinvestors care more about CF.
5. Holding all else constant, the future value of an investmentwill increase if:
(a) the investmentâs expected future cash flows involve more, asopposed to less, uncertainty.
(b) the investment is compounded for a larger, as opposed to asmaller, number of periods.
(c) the investment is compounded at a higher, as opposed to alower, interest rate. (d) both b and c.
