Reference no: EM133030276

Questions -

Q1. The Talley Corporation had a taxable income of $150,000 from operations after all operating costs but before (1) interest charges of $10,000 (2) dividends received of $10,000 (3) dividends paid of $25,000 and (4) income taxes. If a corporation's taxable income is between $100,000 and $335,000, it pays $22,250 on the base of the bracket plus 39% on the excess over the base. Which of the following is correct?

A. The company's average tax rate is 30% after rounding

B. The companies net income is 110,980

C. The company's taxable income is 143,000

D. The companies marginal tax rate is 39%

E. None of the above

Q2. Wells water systems recently reported $8250 of sales and 950 of operating cost other than depreciation and $950 of depreciation. The company had no amortization charges it had $3250 of outstanding bond that carry a 6.75% interest rate, and it's federal plus state income tax rate was 35%. In order to sustain it's operation and those generate sales in cash flows in the future the firm was required to spend $250 to buy new fixed assets and to invest $250 and that's operating working capital. How much free cash flow did was generate?

A. 1880

B. 2270

C.2020

D. 1630

E. 1770