nus of 20% of net income, which is income after taxes. But the bonus is not subject to taxes because the bonus isr goal is to find the company profit after the bonus and taxes are paid. Let B be the amount on which the bonus isars.nus is based plus the taxes paid. Express this as an equation involving Tand B. (Part (a) may be helpful.)plus the bonus paid. Express this as an equation involving Tand B. (Part (c) may be helpful.)d (d) for the variables T and B.MacBook Pro&8.deler{YUP A business has a gross income of $1.56 million. It has promised to pay the CEO a bonus of 20% ean operating expense. The total tax owed is 20% of gross income less the bonus. Our goal is to fibased, and let T be the amount on which taxes are calculated, both in millions of dollars.(a) Express the taxes paid in terms of the variable T.(b) The gross income of $1.56 million equals the amount B on which the bonus is based pl(c) Express the bonus paid in terms of the variable B.(d) The gross income also equals the amount T on which taxes are based plus the bonus pa(e) Solve the system of two equations in two unknowns from parts (b) and (d) for the variaT =B(F) How much is the bonus?millionHow much is paid in taxes?millionHow much profit is left over?%24millionNeed Help?Read itMacBooksc

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Answered: A business has a gross income of $1.56…

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter10: Forecasting Financial Statement

Section: Chapter Questions

Problem 8QE

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The net profit margin tells how much profit a company makes for every dollar it generates in revenue. If N is the net income (the income after taxes have been paid) and R is the total revenue, then the net profit margin M is given by N M(N, R) R = A certain company pays a tax rate of 20% on its income. (a) Use I for the income before taxes, and express the net income N in terms of I. (Be careful: N is the part of I left after taxes-not the part you pay in taxes.) N = (b) Use a formula to express the net profit margin in terms of the variables I and R. M =
The net profit margin tells how much profit a company makes for every dollar it generates in revenue. If N is the net income (income after taxes have been paid) and R is the total revenue, then the net profit margin M is M (N,R) =N/R. This company pays a tax rate of 35% on its income. A) let I represent the company’s income before taxes. Express N as a function of I. (n is the part of I left after taxes) B) express M in terms of I and R
Suppose that X company has a total sales of $340,000. And a net income after tax of $47,600. Calculate the operating margin if you knew that the income tax rate is 30% and the interest rate is 15% A) 25.00% B) 35.30% C) 31.30% D) 23.50%
Suppose a firm’s tax rate is 25%. 1. What effect would a $9.26 million operating expense have on this year's earnings? What effect would it have on next year's earnings? (Select all the choices thatapply.) A. A $9.26 million operating expense would be immediately expensed, increasing operating expenses by $9.26 million. This would lead to a reduction in taxes of 25%×$9.26 million=$2.32 million. B. A $9.26 million operating expense would be immediately expensed, increasing operating expenses by $9.26 million. This would lead to an increase in taxes of 25%×$9.26 million =$2.32 million. C. Earnings would decline by $9.26 million−$2.32 million=$6.94 million. The same effect would be seen on next year's earnings. D. Earnings would decline by $9.26 million−$2.32 million=$6.94 million. There would be no effect on next year's earnings. 2. What effect would a $11.75 million capital expense have on this year's earnings if the capital expenditure is depreciated at a rate of $2.35 million…
Suppose a firm's tax rate is 25%. 1. What effect would a $10.92 million operating expense have on this year's earnings? What effect would it have on next year's earnings? (Select all the choices that apply.) A. $10.92 million operating expense would be immediately expensed, increasing operating expenses by $10.92 million. This would lead to a reduction in taxes of 25%×$10.92 million=$2.73 million. B. A $10.92 million operating expense would be immediately expensed, increasing operating expenses by $10.92 million. This would lead to an increase in taxes of 25%×$10.92 million=$2.73 million C. Earnings would decline by $10.92 million−$2.73 million=$8.19 million. There would be no effect on next year's earnings. D. Earnings would decline by $10.92 million−$2.73 million=$8.19 million. The same effect would be seen on next year's earnings 2. What effect would a $10.25 million capital expense have on this year's earnings if the capital expenditure is depreciated at a rate of $2.05…
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You have calculated the adjusted profit for the company to be $2,000,000. Capital allowance was $20,0000 . The tax rate is 25%. Estimated tax paid during the year is $750,000. Employment Tax Credit available (which is non-refundable) is $700,000. The tax refundable for this company is. Question 5Answer a. $1,100,000 b. $500,000 c. $200,000 d. $750,000
A company has the following income statement. What is its net operating profit after taxes (NOPAT)? Round it to a whole dollar. Will need to find EBIT first. Sales $ 1,050 Costs 600 Depreciation 170 EBIT $ ? Interest expense 50 EBT $ ? Taxes (24%) ? Net income $ ?
Bhupat bhai
Suppose a firm has the following information: Sales = $10million; costs of goods sold (excluding depreciation) = $5 million;depreciation = $1.4 million; other operating expenses = $2 million;interest expense = $1 million. If the tax rate is 25%, what is NOPAT,the net operating profit after taxes? ($1.2 million)
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