Chapter 2
| Chapter 2 |
| Problems 2, 3, 4, 6, 7, 14, 15, 19 |
| Input boxes in tan |
| Output boxes in yellow |
| Given data in blue |
| Calculations in red |
| Answers in green |
| NOTE: Some functions used in these spreadsheets may require that |
| the “Analysis ToolPak” or “Solver Add-In” be installed in Excel. |
| To install these, click on the Office button |
| then “Excel Options,” “Add-Ins” and select |
| “Go.” Check “Analyis ToolPak” and |
| “Solver Add-In,” then click “OK.” |
#4
| Chapter 2 |
| Question 4 |
| Input area: |
| Sales |
| Costs |
| Depreciation expense |
| Interest expense |
| Tax rate |
| Cash dividends |
| Shares outstanding |
| Output area: |
| Income Statement |
| Sales |
$ – 0 |
| Costs |
– |
| Depreciation expense |
– 0 |
| EBIT |
$ – |
| Interest expense |
– |
| EBT |
$ – 0 |
| Taxes (0%) |
– |
| Net income |
$ – 0 |
| Addition to retained earnings |
$ – 0 |
| Earnings per share |
ERROR:#DIV/0! |
| Dividends per share |
ERROR:#DIV/0! |
#6
| Chapter 2 |
| Question 6 |
| Input area: |
| Taxable income |
| Taxable income |
| 0 – 50,000 |
15% |
| 50,001 – 75,000 |
25% |
| 75,001 – 100,000 |
34% |
| 100,001 – 335,000 |
39% |
| 335,001 – 10,000,000 |
34% |
| 10,000,001 – 15,000,000 |
35% |
| 15,000,001 – 18,333,333 |
38% |
| 18,333,334 + |
35% |
| Output area: |
| Taxes: |
| 15% |
$ 50,000 |
| 25% |
(50,000) |
| 34% |
0 |
| 39% |
0 |
| 34% |
0 |
| 35% |
0 |
| 38% |
0 |
| 35% |
0 |
| The marginal tax rate is |
15% |
#7
| Chapter 2 |
| Question 7 |
| Input area: |
| Sales |
| Costs |
| Depreciation Expense |
| Interest Expense |
| Tax rate |
| Output area: |
| Income Statement |
| Sales |
$ – 0 |
| Costs |
– |
| Depreciation expense |
– 0 |
| EBIT |
$ – |
| Interest expense |
– |
| EBT |
$ – 0 |
| Taxes (0%) |
– |
| Net income |
$ – 0 |
| Operating cash flow |
$ – 0 |
#14
| Chapter 2 |
| Question 14 |
| Input area: |
| Sales |
| Costs |
| Other expenses |
| Depreciation expense |
| Interest expense |
| Taxes |
| Dividends |
| 2015 New equity |
| Net new long-term debt |
| Change in fixed assets |
| Output area: |
| Income Statement |
| Sales |
$ – 0 |
| Costs |
– |
| Other expenses |
– 0 |
| Depreciation expense |
– 0 |
| EBIT |
$ – |
| Interest expense |
– |
| EBT |
$ – 0 |
| Taxes |
– |
| Net income |
$ – 0 |
| Dividends |
$ – 0 |
| Addition to retained earnings |
$ – 0 |
| a. |
Operating cash flow |
$ – 0 |
| b. |
Cash flow to creditors |
$ – 0 |
| c. |
Cash flow to stockholders |
$ – 0 |
| d. |
Cash flow from assets |
$ – 0 |
| Net capital spending |
$ – |
| Change in NWC |
$ – 0 |
#15
| Chapter 2 |
| Question 15 |
| Input area: |
| Sales |
| Costs |
| Addition to retained earnings |
| Dividends paid |
| Interest expense |
| Tax rate |
| Output area: |
| Income Statement |
| Sales |
$ – 0 |
| Costs |
– |
| Depreciation expense |
$ – 0 |
| EBIT |
$ – |
| Interest expense |
– |
| EBT |
$ – 0 |
| Taxes |
– 0 |
| Net income |
$ – 0 |
| Dividends |
$ – 0 |
| Addition to retained earnings |
$ – 0 |
#19
| Chapter 2 |
| Question 19 |
| Input area: |
| Sales |
| Costs |
| Administrative and selling expenses |
| Depreciation expense |
| Interest expense |
| Tax rate |
| Output area: |
| Income Statement |
| Sales |
$ – 0 |
| Costs |
– |
| Administrative and selling expenses |
– |
| Depreciation expense |
– 0 |
| EBIT |
$ – |
| Interest expense |
– |
| EBT |
$ – 0 |
| Taxes (0%) |
0 |
| a. |
Net income |
$ – 0 |
| b. |
Operating cash flow |
$ – 0 |
| c. |
Net income was negative because of the tax deductibility and |
| interest expense. However, the actual cash flow from operations |
| was positive because depreciation is a non-cash expense and |
| interest is a financing expense, not an operating. |
