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Assume the following for White Top, Inc.

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Question

Assume the following for White Top, Inc., for the current fiscal year. White Top applies overhead on

the basis of units produced.

  Budgeted overhead $ 228,000 

Actual overhead $ 250,500 

Actual labor hours16,300 

Actual number of units sold   53,500

Underapplied overhead $ 30,000 

Budgeted production (units)   76,000

How many units were produced in the current fiscal year?

 
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abbreviated income statement and balance sheet

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Question

The following table shows an abbreviated income statement and balance sheet for McDonald’s Corporation for

2012.

INCOME STATEMENT OF MCDONALD’S CORP., 2012
(Figures in $ millions)
  Net sales27,587 
  Costs17,589 
  Depreciation1,422 
  
  Earnings before interest and taxes (EBIT)8,576 
  Interest expense537 
  
  Pretax income8,039 
  Taxes2,654 
  
  Net income5,385 
  
BALANCE SHEET OF MCDONALD’S CORP., 2012
(Figures in $ millions)
  Assets2012 2011 Liabilities and Shareholders’ equity2012 2011 
  Current assets        Current liabilities        
  Cash and marketable securities 2,356   2,356  Debt due for repayment —   427  
  Receivables 1,395   1,355  Accounts payable 3,423   3,163  
            
  Inventories 142   137  Total current liabilities 3,423   3,590  
  Other current assets   1,109   636           
            
  Total current assets 5,002   4,484           
  Fixed assets        Long-term debt 13,653   12,154  
  Property, plant, and equipment 24,697   22,855  Other long-term liabilities 3,077   2,977  
            
  Intangible assets (goodwill) 2,824   2,673  Total liabilities 20,153   18,721  
  Other long-term assets 3,003   3,119  Total shareholders’ equity 15,373   14,410  
      
  Total assets 35,526   33,131  Total liabilities and shareholders’ equity 35,526   33,131  
      
In 2012 McDonald’s had capital expenditures of $3,069.
a.Calculate McDonald’s free cash flow in 2012. (Enter your answer in millions.)
  Free cash flow$ million  
b.If McDonald’s was financed entirely by equity, how much more tax would the company have paid? (Assume a tax rate of 35% on the revised pretax income.) (Do not round intermediate calculations. Enter your answer in millions rounded to the nearest whole number.)

  please show all workings for this answer.

question 2

What would be the marginal and average tax rates for a married couple with taxable income of $90,900? For an unmarried taxpayer with the same income? Use Table 3.7. (Do not round intermediate calculations. Enter the marginal tax rates as a whole percent. Enter the average tax rates as a percent rounded to 2 decimal places.)

 (please show how you arrive at your answer for this question also)

 Marginal tax rateAverage tax rate
  Married couple%  %  
  Single person%   %  
  Additional tax$ million  
 
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margin account

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Question

ou’ve just opened a margin account with $16,000 at your local brokerage firm. You instruct your broker to

purchase 700 shares of Landon Golf stock, which currently sells for $47 per share. Suppose the call money rate is 6 percent and your broker charges you a spread of 1 percent over this rate. You hold the stock for 5 months and sell at a price of $54 per share. The company paid a dividend of $.26 per share the day before you sold your stock.

1.What is your total dollar return from this investment? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the “$” sign in your response.)
  Dollar return$   
2.What is your effective annual rate of return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the “%” sign in your response.)
  Effective annual return %  

References eBook & Resources

 
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shares

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Question

fSuppose you purchase 1,350 shares of stock at $36 per share with an initial cash investment of $21,000. The call money rate is 5 percent and you are charged a 1.5 percent premium over this rate. a.Calculate your return on investment one year later if the share price is $44. Suppose instead you had simply purchased $21,000 of stock with no margin. What would your rate of return have been now? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the “%” sign in your response.)     Rate of return %    Without margin, rate of return   %   b.Calculate your return on investment one year later if the share price is $36. Suppose instead you had simply purchased $21,000 of stock with no margin. What would your rate of return have been now? (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the “%” sign in your response.)     Rate of return %    Without margin, rate of return   %   c.Calculate your return on investment one year later if the share price is $20. Suppose instead you had simply purchased $21,000 of stock with no margin. What would your rate of return have been now?(Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the “%” sign in your response.)     Rate of return %    Without margin, rate of return %  

 
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