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Test1 Name (5 points) 1) Explain why the following situation is an agency problem and what cost to the form might result from it. A branch manager lays off experienced full-time employees waffs with parime workers to lower salary expenses and raise this years branch profits, which determines the manager's bonus. (5 points) 2) Calculate the tax liability of a sole proprietorship with ordinary income of S105.000 Range of taxable income Marginal rate 0 to $9.875 1094 9,875 to 40,125 12 40,125 to 85.525 22 85,525 50 163,300 24 (5 points) 3) Explain a specific role of financial intermediaries - the financial asset transformation or risk- sharing. (5 points) 4) What is securitization, and how does it facilitate investment in real estate assets? (20 points) 5) Given the following balance sheet, income statement, historical ratios and industry averages, calculate the financial ratios for the most recent year. Income Statement Pulp, Paper, and Paperboard, Inc. For the Year Ended December 31, 2022 Sales revenue $2,00,976 Less Cost of goods sold 1701.000 Gross profits $ 379,976 Less Operating expenses 273846 Operating profits $ 106,130 Less: Interest expense 19.296 Net profits before taxes $ 86,834 Less: Taxes (40%) 34734 Net profits after taxes $ 52,100 Balance Sheet Pulp, Paper, and Paperboard, Inc. December 31, 2022 Test1 Name (5 points) 1) Explain why the following situation is an agency problem and what cost to the form might result from it. A branch manager lays off experienced full-time employees waffs with parime workers to lower salary expenses and raise this years branch profits, which determines the manager's bonus. (5 points) 2) Calculate the tax liability of a sole proprietorship with ordinary income of S105.000 Range of taxable income Marginal rate 0 to $9.875 1094 9,875 to 40,125 12 40,125 to 85.525 22 85,525 50 163,300 24 (5 points) 3) Explain a specific role of financial intermediaries - the financial asset transformation or risk- sharing. (5 points) 4) What is securitization, and how does it facilitate investment in real estate assets? (20 points) 5) Given the following balance sheet, income statement, historical ratios and industry averages, calculate the financial ratios for the most recent year. Income Statement Pulp, Paper, and Paperboard, Inc. For the Year Ended December 31, 2022 Sales revenue $2,00,976 Less Cost of goods sold 1701.000 Gross profits $ 379,976 Less Operating expenses 273846 Operating profits $ 106,130 Less: Interest expense 19.296 Net profits before taxes $ 86,834 Less: Taxes (40%) 34734 Net profits after taxes $ 52,100 Balance Sheet Pulp, Paper, and Paperboard, Inc. December 31, 2022

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