chapter 2 quiz 2
beginning in 2018, the corporate tax rate is _____ percent, and that rate applies regardless of the level of taxable income
21
OCF formula
EBIT + depreciation - taxes
the cash flow of a firm which is available for distribution to the firm's creditors and stockholders is called the:
cash flow from assets
a firm's interest payments to creditors less net new borrowing
cash flow to creditors
dividends paid out by a firm less net new equity raised
cash flow to stockholders
an increase in the depreciation expense will do which of the following?
decrease net income increase the cash flow from assets
the _____ industry paid the highest average tax rate and the _____ industry paid the lowest average tax rate
electric utilities biotech
average tax rate
equals the total taxes paid divided by total taxable income
with a _____ tax, there is only one tax rate, so the rate is the same for all income levels
flat rate
net capital spending
is equal to zero if the decrease in the net fixed assets is equal to the depreciation expense
marginal tax rate
is the percentage of the next dollar you earn that must be paid in taxes
cash flow from assets (fcf) involves three components:
operating cash flow capital spending change in net working capital
which one of the following must be true if a firm had a negative cash flow from assets?
the firm utilized outside funding (i.e., raised new debt and equity)
(t/f) a primary reason for the 2017 tax cuts was to eliminate the incentive for tax inversions and other strategies to avoid the US corporate tax
true