Student Name: Student Number: Atilim University School of Business XXXXXXXXXXSpring Semester MAN 328: Financial Literacy and Legislation for Entrepreneurs Make-up Exam 03 July XXXXXXXXXXJuly Saturday...

I need answers of those questions only.


Student Name: Student Number: Atilim University School of Business 2019-2020 Spring Semester MAN 328: Financial Literacy and Legislation for Entrepreneurs Make-up Exam 03 July 2020-04 July Saturday 2020: 23: 59 You have to submit your answers until 04 July Saturday 23:59 from the Moodle. Do not e-mail. Write your answers under the question to the given empty space within this document. (You could enlarge spaces) Copy and paste Excel calculations into your answers. Don’t forget to write your name and student number. You have to complete this exam/homework alone, by yourself. You can use class notes, slides, and internet. You cannot talk with each other. You cannot complete homework together. This is an individual exam/homework. 1- Personal Income Tax rates for 2020 are as shown below. 1st Income Bracket 15% 0 – ₺22,000 2nd Income Bracket 20% ₺22,000 – ₺49,000 3rd Income Bracket 27% ₺49,000 – ₺120,000 4th Income Bracket 35% ₺120,000 - ₺600.000 5th Income Bracket 40% ₺600.000 + Mr. Blue operates a grocery store. His earnings for 2020 is 100,000 TL. Mr. Red is a medical doctor. His earnings for 2020 is 850,000 TL. Calculate the 2020 income taxes of Mr. Blue and Mr. Red. "Effective tax rate = Total tax paid (calculated) / Total earnings" Calculate the effective tax rate of Mr. Blue and Mr. Red. Tell the reason why the effective tax rates are different. (20 points) 2- Prepare Income statement and Balance Sheet of Cotton Department Store Company given below : (20 points) Interest income: 100.000-TL Cost of goods sold: 300-TL each unit Building: 3.000.000-TL Short Term Loan: 900.000-TL Depreciation of term: 200.000-TL Interest Expenses: 400.000-TL Inventory : 6.000.000-TL Capital: 500.000-TL Cash : 600.000-TL Advertising: 400.000-TL Vehicles: 500.000-TL Salaries: 250.000-TL Long Term Bank Credit: 5.000.000-TL Rent: 200.000-TL Accounts Receivable: 500.000-TL Accumulated Depreciation : 500.000-TL Utilities: 150.000-TL Sales: 400-TL*42.000 units Return from sales: 2.000 units Bank Account : 400.000-TL Account Payable : 1.600.000-TL Profit of year: XXXXXXXX-TL Tax payable: XXXXXXX-TL Corporate Income Tax Rate : 20% Hint: First prepare Income Statement. Because you will need outcomes of income statement while preparing Balance Sheet. You may use some of the amounts mentioned above both at the income statement and balance sheet. Income Statement: Cotton Department Store Company 31.12.2019 Balance Sheet 3- Mr. KAYA is a government employee and he has 250.000-TL cash. He want to make a profitable investment for the future with his money. There are lands sold in Polatlı 500-TL per square meter. There is an Ankara-İzmir highway project passing from Polatlı. It is expected that project will increase land prices 100% in 2 years. Banks give credit with 15% per year interest. (credit will be paid at the end of second year) Credit amount could not exceed 75% of land value. Explain how much he could earn after 2 years with his own money and how much he could earn after 2 years by using financial leverage. What are the risks of using financial leverage? (10 points) 4- King Photography workshop is engaged in photo printing. The costs and machines of the workshop are as mentioned below. Rent for shop : 4.000-TL per month Labor cost: 9.000-TL per month Electricity bill: 2.000-TL per month Photograph paper: 600-TL(500 papers) Ink:500-TL (1 liter) Printing Machine : 600.000-TL, bought 2 years ago, useful life time 5 years Furniture : 120.000-TL, bought last year, useful life time 10 years Computers: 48.000-TL, bought 4 years ago, useful life time 3 years Calculate breakeven point for this photo printing workshop. (show fixed and variable costs at the breakeven point) (15 points) 5- Cream Patisserie produces cakes and pastries. The monthly production costs of the bakery are shown below: Rent:4.000-TL Depreciation :2.000-TL Electricity:2.250-TL Labor Hour cost per hour: 30-TL   Cakes Pastry Units of product to be manufactured 7.000 units 2.000 units Direct Material(fabric) cost per unit 10-TL 25-TL Direct Labor Hours (DLH) per unit 15 minutes 30 minutes Allocate manufacturing overheads and calculate unit cost of one cake and one pastry. If one cake is sold for 20-TL and one pastry is sold for 50-TL, how much profit is made per unit and in total? Which product must be produced for higher profit under same working time. (15 points) 6- Businesses spend large amount of money on assets. To give decision where to spend money they evaluate different business investments. For evaluation they use capital budgeting models. Toy Production Company want to buy a new molding machine to save labor costs. Molding machine is 300.000-TL and its life time is 5 years. (Salvage value=0) Machine is depreciated with normal depreciation method according to lifetime. Machine will decrease labor cost 7.000-TL per month. (84.000-TL per year) Evaluate this project by using 4 methods of capital budgeting model. Income Tax rate 20%. Discount rate= 4% Evaluate if company should buy this molding machine or not with each method? (20 points) Show your calculations and make logical explanations about your decisions.