The city of Morehead leased equipment. The life of the noncancellable lease is 10 years. Using an 8 percent interest rate, the p
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Answer:
Effective accounting tax rate = 17.61%
Explanation:
given data
Pre Tax book income = $1,026,000
Reserve for warranties = $101,300
Tax depreciation = $206,500
Deduction inform of dividends received = $55,200
to find out
accounting effective tax rate
solution
we assume here tax rate is 21 %
So Taxable income will be here as
Taxable income = [ $1,026,000 + $101,300 ] - [ $206,500 + $55,200 ]
Taxable income = $1,127,300 - $261,700
Taxable income = $865,600
Tax @21% = $865,600 × 21%
Tax = $181,776
Effective accounting tax rate will be
Effective accounting tax rate =
Effective accounting tax rate = 17.61%
Answer:
maximum sum of $891.00
Explanation:
given data
Face Value = $1,000
Annual Coupon Rate = 9.50%
Time to Maturity = 15 years
yield to maturity = 11%
to find out
maximum price you should be willing to pay for the bond
solution
we know that Semiannual Coupon Rate will be = 4.75%
so semiannual Coupon will be = Semiannual Coupon Rate × Face Value
semiannual Coupon = 4.75% × $1,000
Semiannual Coupon = $47.50
and Semiannual Period will be for 15 year = 30
and Semiannual yield to maturity will be here YTM = 5.50%
so
Current Price will be here
Current Price = Semiannual Coupon × +
...................1
put here value
Current Price = $47.50 × +
Current Price = $891.00
so pay a maximum sum of $891.00