精品课程财务管理基础英文课件ch02

1、2-1 pearson education limited 2004fundamentals of financial management, 12/ecreated by: gregory a. kuhlemeyer, ph.d.carroll college, waukesha, wi2-21.describe the four basic forms of business organization in the united states - and the advantages and disadvantages of each. 2.understand how to calcul

2、ate a corporations taxable income and how to determine the corporate tax rate - both average and marginal. 3.understand various methods of depreciation. 4.understand why acquiring assets through the use of debt financing offers a tax advantage over both common and preferred stock financing. 5.descri

3、be the purpose and make up of financial markets. 6.demonstrate an understanding of how letter ratings of the major rating agencies help you to judge a securitys default risk.7.understand what is meant by the term “term structure of interest rates” and relate it to a “yield curve.”2-3uthe business en

4、vironmentuthe tax environmentuthe financial environment2-4usole proprietorshipsupartnerships (general and limited)ucorporationsulimited liability companies2-5uoldest form of business organization.is accounted for on your .- a business form for which there is one owner. this single owner has unlimite

5、d liability for all debts of the firm.2-6usimplicityulow setup costuquick setupusingle tax filing on individual formuunlimited liabilityuhard to raise additional capitalutransfer of ownership difficulties2-7is accounted for on each partners . - a business form in which two or more individuals act as

6、 owners.2-8- limited partners have liability limited to their capital contribution (investors only). at least one general partner is required and all general partners have unlimited liability.- all partners have unlimited liability and are liable for all obligations of the partnership.2-9ucan be sim

7、pleulow setup cost, higher than sole proprietorshipurelatively quick setupulimited liability for limited partnersuunlimited liability for the general partnerudifficult to raise additional capital, but easier than sole proprietorshiputransfer of ownership difficulties2-10uan artificial entity that ca

8、n own assets and incur liabilities.is accounted for on the . - a business form legally separate from its owners.2-11ulimited liabilityueasy transfer of ownershipuunlimited lifeueasier to raise large quantities of capitaludouble taxationumore difficult to establish umore expensive to set up and maint

9、ain2-12is accounted for on each “members” .- a business form that provides its owners (called “members”) with corporate-style limited personal liability and the federal-tax treatment of a partnership.2-13ulimited liabilityucentralized managementuunlimited lifeutransfer of ownership without other own

10、ers prior consent2-14ulimited liabilityueliminates double taxationuno restriction on number or type of ownersueasier to raise additional capitalulimited life (generally)utransfer of ownership difficulties (generally)2-15corp. taxable incometaxat leastbut 0)50,00075,000 25% $ 7,500 + .25x(inc 50,000)

11、75,000100,000 34% 13,750 + .34x(inc 75,000)100,000335,000 39% 22,250 + .39x(inc 100,000)335,00010,000,000 34% 113,900 + .34x(inc 335,000)10,000,00015,000,000 35% 3,400,000 + .35x(inc 10,000,000)15,000,00018,333,333 38% 5,150,000 + .38x(inc 15,000,000)18,333,33335% 6,416,667 + .35x(inc 18,333,333)2-1

12、6lisa miller of basket wonders (bw) is calculating the , , andfor the fiscal year ending december 31.bws corporate taxable income for this fiscal year was $250,000.2-17 = = $80,750 / $250,000 = income tax liability = $22,250 + .39 x ($250,000 -) = $22,250 + $58,500 = $80,7502-18ugenerally, profitabl

13、e firms prefer to use an accelerated method for tax reporting purposes. represents the systematic allocation of the cost of a capital asset over a period of time for financial reporting purposes, tax purposes, or both.2-19u u udouble declining balance (ddb)umodified accelerated cost recovery system

14、(macrs)2-20lisa miller of basket wonders (bw) is calculating the depreciation on a machine with a depreciable basis of $100,000, a , and a 5-year property class life.she calculates the annual depreciation charges using macrs. note ignore “bonus” depreciation discussed in 2-252-21uassets are deprecia

15、ted based on one of eight different property classes. ugenerally, the half-year convention is used.udepreciation in any particular year is the maximum of ddb or straight-line. a switch in depreciation methods is made from ddb to sl during the life of the asset.2-22 depreciation depreciation net book

16、 year calculation charge value 0 - - $100,000 1 .5x2x(1/5) x $100,000 $ 20,000 80,000 2 2 x ( 1 / 5) x $80,000 32,000 48,000 3 2 x ( 1 / 5) x $48,000 19,200 28,800 4 $28,800 / 2.5 years 11,520 17,280 5 $28,800 / 2.5 years 11,520 5,760 6 $28,800 / 2.5 yrs x .5 5,760 0 2-23recoveryproperty classyear3-

17、year5-year7-year1 33.33% 20.00% 14.29%2 44.45 32.00 24.493 14.81 19.20 17.494 7.41 11.52 12.495 11.52 8.936 5.76 8.927 8.938 4.462-24 increases a limited and additional temporary depreciation deduction of 50% in the first year - subject to stipulations. designed to enhance capital investment by busi

18、nesses.2-25: $200,000 machine under 5-year macrs property class. bonus = 50% of $200k = $100k. remaining $100k ($200k - $100k bonus) at 20% rate based on macrs is $20k. result is $120k ($100k + $20k) depreciation charge in the first year. set to expire soon, so will ignore in subsequent problems (no

19、te ignored in slide 2-20)2-26require corporations to pay 25% of their estimated annual tax liability on the 15th of april, june, september, and december.is a special tax which equals 20% of alternative minimum taxable income (generally not equal to taxable income). corporations pay the maximum of am

20、t or regular tax liability.2-27is the interest paid on outstanding debt and is .cash dividend is the cash distribution of earnings to shareholders and is not a tax deductible expense.the is: (interest expense) x ( 1 - tax rate)thus, debt financing has a !2-28ulosses are generally carried back first

21、and then forward starting with the earliest year with operating gains.ucorporations that sustain a net operating loss can carry that loss back (carryback) 2 years and forward () to offset operating gains in those years.2-29lisa miller is examining the impact of an operating loss at basket wonders (b

22、w) in 2003. the following time line shows operating income and losses. 20072006200520042-30the loss can offset the gain in each of the years 2005 and 2006. the remaining can be carried forward to 2008 or beyond.impact: tax refund for federal taxes paid in 2005 and 2006. 20072006200520042-31uoften hi

23、storically, capital gains income has received more favorable u.s. tax treatment than operating income.ugenerally, the sale of a “capital asset” (as defined by the irs) generates a (asset sells for more than original cost) or (asset sells for less than original cost).2-32are deductible only against .

24、ucurrently, are taxed at ordinary income tax rates for corporations, or a maximum 35%.2-33uthe u.s. has a with four tax brackets of , 25%, , and .upersonal income taxes are determined by taxable income, filing status, and various credits.uresult is that low income individuals pay no federal tax and

25、others may fluctuate between the marginal rates.2-34ubusinesses interact continually with the are composed of all institutions and procedures for bringing buyers and sellers of financial instruments together.uthe purpose of financial markets is to efficiently allocate savings to ultimate users.2-35i

26、nvestment sectorfinancialintermediariessavings sectorfinancial brokerssecondary market2-36financialintermediariessavings sectorfinancial brokerssecondary marketbusinessesgovernmenthouseholds2-37financialintermediariesfinancial brokerssecondary markethouseholdsbusinessesgovernmentinvestment sector2-3

27、8financialintermediariessavings sectorsecondary marketinvestment bankersmortgage bankersinvestment sector2-39savings sectorfinancial brokerssecondary marketcommercial bankssavings institutionsinsurance cos.pension fundsfinance companiesmutual fundsinvestment sector2-40financialintermediariessavings

28、sectorfinancial brokerssecurityexchangesotcmarketinvestment sector2-41uin a rational world, the highest expected returns will be offered only by those economic units with the most promising investment opportunities.savings tend to be allocated to the most efficient uses.ufunds will flow to economic

29、units that are willing to provide the greatest expected return (holding risk constant).2-42riskexpected return (%)long-term government bondsinvestment-grade corporate bondsmedium-grade corporate bondspreferred stocksconservative common stocksspeculative common stocks2-43 is the ability to sell a significant volume of securities in a short period of time in the secondary market without significant price