88. Which of these statements related to free cash flow is correct?
89. What is the fundamental difference between IFRS and GAAP?
90. What is the marginal tax rate for a corporation with $60,000 of taxable income and an
average tax rate of 18% if the next-lowest marginal tax rate of 15% covers taxable incomes up to
$50,000?
91. Assuming at the $50,000 income level that the corporate tax rate increases from 15 to
25%, which of the following statements is correct for a firm with $75,000 of taxable income?
92. What is the highest marginal rate at which corporate income is taxed?
93. Which of the following
cannot
be used to reduce taxable corporate income?
94. Assume a firm increases its revenue by $100 while increasing its cost of goods sold by
$85. How much additional tax will the firm owe if its marginal tax rate is 25%?
95. According to the U.S. tax code at the beginning of 2014, the highest marginal tax rate for
personal taxpayers is:
96. Which one of the following statements is correct for a corporation with a negative net
income in both the present and the last fiscal year?
97. Assume a single taxpayer is taxed at 10% on the first $9,075 of taxable income, 15% on
the next $27,825 of income, and at 25% for the following $52,450 of income. What is the average
tax rate for that individual if her taxable income is $41,350?
98. An individual’s income for the year includes both dividend and interest payments. Which
of these statements correctly applies to that individual’s tax liability?
99. A major goal of the Sarbanes-Oxley Act is to:
100. Which one of the following is
not
a requirement imposed by the Sarbanes-Oxley Act?
101. Who pays taxes on earnings distributed as dividends?
102. Assume tax rates on single individuals are 10% on taxable income up to $9,075, 15% on
income of $9,076 to $36,900 and 25% on income of $36,901 to $89,350. What is the tax liability
for a single individual with $52,000 of taxable income, which includes $2,000 of dividends?
103. Which of the following forms of income can individuals defer from taxation?
104. Which type of income is subject to “double taxation”?
105. Professor Diehard found an effective antibiotic for the DEPRESS bacteria, and patented
the drug. He believes that he can sell the patent for $20 million. He then formed a corporation
and invested $400,000 in setting up a production plant. There are 2 million shares of stock
outstanding. If the professor’s belief is correct, what would be the price per share and the book
value per share?
106. You have gathered this information on a firm: $500,000 sales, $10,000 cash dividends,
$300,000 cost of goods sold, $20,000 administrative expense, $20,000 depreciation expense,
$40,000 interest expense, $10,000 purchase of productive equipment, no changes in working
capital, and a tax rate of 35%. What is the free cash flow?
107. What is the overall change in cash resulting from: $300 increase in inventories, $150
increase in accounts payable, $120 decrease in accounts receivable, $60 decrease in other
current assets, $150 decrease in other current liabilities?