WEEK 1 HOMEWORK ASSIGNMENT- 240
Problem P2-2 (Part a only):
Part a.	Average Corporate Tax Rates
	Earnings				After-		Average
	Before		Tax		tax		Tax
	Taxes		Liability		Earnings		Rate
	10,000
	80,000
	300,000
	500,000
	1,500,000
	10,000,000
	20,000,000
Problem P2-5
	Earnings before interest and taxes(EBIT):				$50,000
	Tax Rate:	35%
Part a: The firm pays $12,000 in interest
	EBIT
	Less:Interest Expense
	Earnings before taxes
	Less: Taxes
	Earnings after taxes
	and available to
	common stockholders
Part b: The firm pays $12,000 in preferred dividends
	Earnings before taxes
	Less: Taxes
	Earnings after taxes
	Less: Preferred div.
	Earnings available to
	common stockholders
Exercise 3-1 (Parts a. and b. only):
		(Use Table 3.1 as example)
Part a.
		My Company
		Income Statement
		For Year Ended, December 31, 200X
		Sales Revenue
		Less: Cost of Goods Sold
		Gross Profit
		Less: Operating Expenses
			Selling Expense
			Gen. & Admin. Expense
			Lease Expense
			Depreciation Expense
		Total Operating Expenses
		Operating Profit (EBIT)
		Less: Interest Expense
		Net Profit Before Taxes
		Less: Income Taxes (35%)
		Net Profits after Taxes
Part b. Income Taxes (Calculate Income Taxes Paid Only)
			Net Profit before Taxes
			Income Tax Rate
			Income Taxes Paid