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ECON-2819 Study Guide - Final Guide: Pouce Coupe, Risk Premium, Nominal Interest Rate

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School
University of Winnipeg
Department
ECONOMICS
Course
ECON-2819
Professor
Hai Ta

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Document Summary

Mid term test dec. 11 ,2009 9:00 a. m. 12:00 p. m. Each of the following questions is followed by several suggested answers or completions. Select the best alternative and place the corresponding letter on the accompanying computerized answer sheet. (value: 20x 2 = 40 points) The harlow corporation has promised to pay its debt holders an amount of ,700 over the next year. Calculate harlow"s debt and equity level if its assets total at the end of the year, value of debt =( ) value of equity = ( ). If asset levels is of ,200, value of debt =( ) value of equity = This show that the value of debt and value of the equity of a corporation is contingent on ( ). It also show that a corporate shareholder has ( a) b) c) d) e) Given mary"s income this year and next year and the availability of financial markets,

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Related Questions

11.) Compare and contrast the investment decisions that you might make as an individual versus a corporation. Include both the accounting investment aspect and the financial investment aspect (they are different aspects because they both have different goals). Provide specific examples of each (should be four categories: corporate financial investments; corporate accounting investments; individual financial investments; and individual accounting investments). You may need to use outside sources for some information. Be sure to cite your sources.

Calculate the corporate income tax for each of the following corporate taxable incomes. For each, determine the effective (average) tax rate and also the marginal tax rate.

A) $15,000

B) $88,000

C) $180,000

D) $400,000

E) $16,700,000

An international Corporation purchased a jet plane for use by the firm's engineers. It has an initial cost of $1,000,000, and will be sold by $500,000 at the end of year 7. The plane will save the transportation fee of $500,000 yearly, and annual O&M costs will be $100,000. The corporation operates in a state that has a corporate tax rate of 8% and the incremental federal tax is 34%.

1.Show before-tax cash flows (BTCF) for n=0 to n=7.

2. Compute the depreciation schedule using MACRS Depreciation.

3. Determine taxable incomes for n=0 to n=7.

4. Compute the combined (federal + state) income tax rate for Wang Systems Corporation. Use this rate as after-tax effective rate and compute income taxes.

5. Show after-tax cash flows (ATCF) for n=0 to n=7.

6.Find the PW for the corporation after taxes, if MARR is 10%, and determine if this purchase is satisfactory.