Question

Falcon Networks

Falcon Networks is a leading semiconductor company with operations in 17 different countries. Information about the company's taxes appears below:

Falcon Networks	​	​
Components of Income Tax Expense	​	​
(in millions)	​	​
​	2012	2011
Current - Federal	$ 55.65	$ 47.52
- Foreign	83.85	78.95
- State and Local	14.69	12.5
Total Current	$154.19	$138.97
​	​	​
Deferred - Federal	$ 30.28	$ 42.90
- Foreign	23.89	14.58
Total Deferred	$ 54.17	$ 57.48
​	​	​
Total Income Tax Expense	$208.36	$196.45
​	​	​
Note: Falcon Networks has no current liability at year-end with respect to total current taxes.	​	​
​	​	​
Components of Income before Taxes	2012	2011
United States	$256.35	$253.68
Foreign	236.85	198.85
Total	$493.20	$452.53

1.Based on the information provided by Falcon Networks how much cash did income taxes use during 2012?

Group of answer choices

$154.19 million

$54.17 million

$208.36 million

$284.84 million

2.Using the information provided by Falcon Networks, determine the federal effective tax rate for 2012.

Group of answer choices

33.52%

35.00%

42.25%

45.49%

3.

Using the information provided by Falcon Networks, determine the foreign effective tax rate for 2012.

Group of answer choices

33.52%

35.00%

42.25%

45.49%

4.

Using the information provided by Falcon Networks determine the combined effective tax rate for 2012.

Group of answer choices

33.52%

35.00%

42.25%

45.49%

Answer 1

1. Falcon Networks used $ 154.19 million cash during income taxes use in 2012

2. Federal effective tax rate for 2012. = 55.65+30.28/256.35 = 33.52%

3. Foreign effective tax rate for 2012 = 107.74 / 236.85 = 45.49%

4. combined effective tax rate for 2012. = 208.36 / 493.2 = 42.25%

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