Return on Software: Maximizing the Return on Your Software Investment

Chapter 16 Self-Study Questions

1.	Their taxable income is less than $50,000, so the entire amount is taxed at 15%. They owe $5625.
3.	The first $50,000 is taxed at 15% for a liability of $7500. The next $25,000 is taxed at 25% for a liability of $6250. The last $7000 is taxed at 34% for a liability of $2380. The total liability is $16,130.
6.	The tax at $85,000 is $17,150. The tax at $105,000 is $24,200. T = (24,200 – 17,150) / (105,000 – 85,000) = 7050 / 20,000 = 35.25%
7.	7. T = (35.25%) (1 – 8%) + 8% = (0.3525) (0.92) + 0.08 = 0.3243 + 0.08 = 0.4043 or 40.43%

10.	(A) End of Year (B) Before-Tax Cash-Flow Stream (C) Loan Principal (D) Loan Interest (E) Depreciable Investment (F) Depreciation Expense (G) Taxable Income (B + D + F) (H) IncomeTax Cash-Flow ...