Paper , Order, or Assignment Requirements

Problem: 3 from Chapter 2
Market Values and Book Values Klingon Cruisers, Inc., purchased new cloaking machinery three years ago for $7 million. The machinery can be sold to the Romulans today for $5.2 mil- lion. Klingon’s current balance sheet shows net fixed assets of $4.5 million, current liabilities of $1.8 million, and net working capital of $750,000. If all the current assets were liquidated today, the company would receive $2.7 million cash. What is the book value of Klingon’s assets today? What is the market value?

Problem: 15 from Chapter 2
Calculating Total Cash Flows Schwert Corp. shows the following information on its 2010 income statement: sales $193,000; costs $96,500; other expenses $5,100; depreciation expense $13,800; interest expense $10,400; taxes $23,520; dividends $12,500. In addition, you’re told that the firm issued $6,000 in new equity during 2010, and redeemed $7,500 in outstanding long-term debt.
a. What was the 2010 operating cash flow?
b. What was the 2010 cash flow to creditors?
c. What was the 2010 cash flow to stockholders?
d. If net fixed assets increased by $28,000 during the year, what was the addition to NWC?

Problem: 19 from Chapter 2
Marginal versus Average Tax Rates (Refer to Table 2.3.) Corporation Growth has $86,000 in taxable income, and Corporation Income has $8,600,000 in taxable income.
a. What is the tax bill for each firm?
b. Suppose both firms have identified a new project that will increase taxable income by $10,000. How much in additional taxes will each firm pay? Why is this amount the same?