Chapter 2

Problems 2, 3, 4, 6, 7, 14, 15, 19

Input boxes in tan
Output boxes in yellow
Given data in blue
Calculations in red
Answers in green

NOTE: Some functions used in these spreadsheets may requ

the "Analysis ToolPak" or "Solver Add-In" be installed in Exc
To install these, click on the Office button
then "Excel Options," "Add-Ins" and select
"Go." Check "Analyis ToolPak" and
"Solver Add-In," then click "OK."

adsheets may require that

be installed in Excel.

Chapter 2
Questions 2-4
Input area:

Sales
Costs
Depreciation expense
Interest expense
Tax rate
Cash dividends
Shares outstanding

Output area:

Income Statement
Sales
Costs
Depreciation expense
EBIT
Interest expense
EBT
Taxes (0%)
Net income

Addition to retained earnings

$
$

Earnings per share

#DIV/0!

Dividends per share

#DIV/0!

Chapter 2
Question 6
Input area:

Taxable income
Taxable income
0 - 50,000
50,001 - 75,000
75,001 - 100,000
100,001 - 335,000
335,001 - 10,000,000
10,000,001 - 15,000,000
15,000,001 - 18,333,333
18,333,334 +

15%
25%
34%
39%
34%
35%
38%
35%

Output area:

Taxes:
15%
25%
34%
39%
34%
35%
38%
35%
The marginal tax rate is

50,000
(50,000)
0
0
0
0
0
0
15%

Chapter 2
Question 7
Input area:

Sales
Costs
Depreciation Expense
Interest Expense
Tax rate

Output area:

Income Statement
$

Sales
Costs
Depreciation expense
EBIT
Interest expense
EBT
Taxes (0%)
Net income
Operating cash flow

$
$

Chapter 2
Question 14
Input area:

Sales
Costs
Other expenses
Depreciation expense
Interest expense
Taxes
Dividends
2015 New equity
Net new long-term debt
Change in fixed assets

Output area:

Income Statement
$

Sales
Costs
Other expenses
Depreciation expense
EBIT
Interest expense
EBT
Taxes
Net income

Dividends
Addition to retained earnings

$
$

a. Operating cash flow

b. Cash flow to creditors

c. Cash flow to stockholders

d. Cash flow from assets

Net capital spending

Change in NWC

Chapter 2
Question 15
Input area:

Sales
Costs
Addition to retained earnings
Dividends paid
Interest expense
Tax rate

Output area:

Income Statement
$

Sales
Costs
Depreciation expense
EBIT
Interest expense
EBT
Taxes
Net income
Dividends
Addition to retained earnings

$
$

$
$
$

Chapter 2
Question 19
Input area:

Sales
Costs
Administrative and selling expenses
Depreciation expense
Interest expense
Tax rate

Output area:

Income Statement
Sales
Costs
Administrative and selling expenses
Depreciation expense
EBIT
Interest expense
EBT
Taxes (0%)
a. Net income

b. Operating cash flow

0
-

c. Net income was negative because of the tax deductibility and

interest expense. However, the actual cash flow from operations
was positive because depreciation is a non-cash expense and
interest is a financing expense, not an operating.