Chapter 2

Questions and Problems 2, 4, 6, 8

2.

625,000 sales
260,000 costs
79,000 depreciation
286,000 ebit
43,000 interest
243,000 taxable income
85,000 taxes
157,950 net income

4.

EPS= NI / SHARES= 157,950 / 40,000= 3.95 per share

DPS= DIVS / SHARES= 60,000 / 40,000= 1.50 per share

6.

taxes=0.15(50k)+0.25(25k)+0.34(25k)+0.39(335k-100k)=123,650

8.

16,550 sales
5,930 cost
1,940 depreciation
8,680 ebit
1,460 interest
7,220 taxable income
2,527 taxes
4,693 net income
OCF= EBIT+D-T=8,680+1,940-2,527= $8,093