Different legal forms for a firm

Assignment Help Finance Basics
Reference no: EM131054244

Question: You want to compare the earnings from two different legal forms for a firm: Corporate and Proprietor. Your pre-tax income is $500,000 in both. However there is a difference in the taxes you pay.

1) Corporate pays corporate tax rate of 30%. After paying corporate taxes the rest is distributed as dividends to owners. They pay personal tax on these dividends at the rate 18%.

2) Proprietor pays personal tax on 36% only.

Create an Excel worksheet in which you show the pre-tax earnings, the taxes paid, the earnings after taxes for both corporate and proprietor.

Reference no: EM131054244

Questions Cloud

What is the present value : What is the present value of $13,750 to be received 4 years from today if the discount rate is 4.75 percent?
Differences between it and operational planning : What is Strategic planning it's traits what it involves and the main differences between it and operational planning.
Advantages and disadvantages of using generated keys : What are the advantages and disadvantages of using generated (surrogate) keys?
Cost of healthcare services : How might the ways in which we produce, deliver, and pay for care be changed in order to increase access, improve quality, and the the cost of healthcare services?
Different legal forms for a firm : Question: You want to compare the earnings from two different legal forms for a firm: Corporate and Proprietor. Your pre-tax income is $500,000 in both. However there is a difference in the taxes you pay.
What aspect would you consider most critical or important : What do you find unusual or of interest as a forensic or crime scene investigator working in today's technological environment? What in your opinion was mishandled in this case based upon what you have read regarding the case in your text?
Initial cash flow for new prroject : Samson's now wants to tear down the original structure and build a new strip mall on the site at an estimated cost of $2.3 million. What amount should be used as the initial cash flow for new prroject?
What do these changes mean for management : How have U.S. prisons changed since the big-house era? What do these changes mean for management?
Find the probability that at least three : If there are 30 people in a room, use simulation to find the probability that at least three of them will have the same birthday. (Assume that there are 365 days and all people have the equal chance to be born on each single day)

Reviews

Write a Review

 

Finance Basics Questions & Answers

  What are your monthly car payments

You are considering buying a new car. the sticker price is $15,000 and you have $2,000 to put toward a down payment. If you can negotiate a nominal annual interest rate of 10% and you wish to pay for the car over a 5 year period, what are your mon..

  What will be the new level of total reserves

If interest rates do not change, what will be the new level of total reserves? What must you assume to make this calculation? If interest rates do change, which way are they likely to move?

  Real gdp is the total market value of the final goods

Assume that, in the population, 95 million people worked for pay last week, 5 million people did not work for pay but had been seeking a job, 5 million people did not work for pay and had not been seeking a job for the past several months, and 45 mil..

  What is financial engineering

Describe how investment and commercial banks apply the methods of financial engineering to problems such as (i) new product development, (ii) derivative securities valuation, (iii) portfolio structuring, and (iv) risk management.

  How much do you need to set aside today

How much do you need to set aside today if you can place your money in an investment vehicle earning an average of 4.50% per year and how much money did Ken's parents place into his college account?

  Write down the equation of security market line find

the following data have been developed for the donovan company the manufacturer of an advanced line of

  Determine implication for the equity market

Why does it make sense that the right to residual income and control go together? If theey are separated, how does this affect the value of a claim to residual income?

  Determining annuity evaluation

You will live at least 35 more years. Ignoring taxes, should you purchase the annuity? Base your response entirely on financial grounds.

  You were recently hired as management director of the new i

you were recently hired as management director of the new i can business incorporated icbi. you have been asked to

  Histories of both of amazon and yahoo

Review Case 21 "How Amazon.com became the leading online retailer by 2011", and Case 23 "Is Yahoo!'s business model working in 2011?" located in the textbook to complete this assignment.

  Comparing and contrasting debt and equity financing

Prepare a paper comparing and contrasting debt and equity financing. In your paper, discuss the following questions:

  Compute the net present value of the actual cash flows

Compute the net present value of the actual cash flows as of the beginning of the investment.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd