Firm E must choose between two alternative transactions. Transaction 1 requires a $11,100 cash outlay that would be nondeductible in the computation of taxable income. Transaction 2 requires a $15,800 cash outlay that would be a deductible expense. Determine the after-tax cost for each transaction. Assume Firm E’s marginal tax rate is 10 percent. Determine the after-tax cost for each transaction. Assume Firm E’s marginal tax rate is 30 percent.

Answers

Answer 1

Answer:

Answer:

If the tax rate is 10% the better option is transaction 1 ($11,100 to 14,220)

IF the tax rate is 30% the better option is transaction 2 ($10,885 to 11,100)

Explanation:

We will compare the after tax cost for transaction two and check if it is better than 11,100 which will be the net cost for transaciton one

We must understad that the tax income deductible transacton provides a tax shield on the tax income, therefore his net effect is lower after considering taxes.

the rate will be think it as a discount to the pruchase price

at 10% income rate:

15,800 x ( 1 - 10% ) = 14,220

at 30% income rate

15,500 x ( 1 - 30% ) = 10,885

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Assume that you are the portfolio manager of the SF Fund, a $3 million hedge fund that contains the following stocks. The required rate of return on the market is 11.00% and the risk-free rate is 2.00%. What rate of return should investors expect (and require) on this fund?Stock Amount Beta
A 1075000 1.2
B 675000 0.5
C 750000 1.4
D 500000 0.75

Answers

Answer:

Explanation:

AVERAGE BETA = (INVESTMENT * BETA) / TOTAL INVESMENT

3052500 / 3000000

1.0175

Required Return = Risk free Return + (Market Return - Risk free return)* Beta

Required Return = 5% + (10% - 5%)*1.0175

Required Return = 10.08%

The gross profit method is most commonly used to:_______ a. estimate the cost of inventory from incomplete records. b. determine the exact cost of inventory. c. develop a sales budget. d. replace the year-end physical inventory.

Answers

Answer:

a. estimate the cost of inventory from incomplete records.

Explanation:

The gross profit method is used to estimate the cost of inventory from incomplete records. This is done by determining the amount of gross profit using the Sales Revenue and the Gross Profit Margin. Then finding the difference between the Cost of Goods available for sale and this Gross Profit to reach to the estimated cost of inventory.

What are three strategies that you can use to make better financial decisions?

Answers

Investing at a young age so you can either have a heathy amount of money or retire at a young age, try to have people work for you and not work for someone, be smart with your money and use common sense when buying something. Example: “do I really need this though?”

I would say save, invest and start a business

Consider two markets: the market for coffee and the market for hot cocoa·The initial equilibrium for both markets is the same, the equilibrium price is $4.50, and the equilibrium quantity is 31.0. When the price is $9.75, the quantity supplied of coffee is 73.0 and the quantity supplied of hot cocoa is 101.0. For simplicity of analysis, the demand for both goods is the same. Using the midpoint formula, calculate the elasticity of supply for hot cocoa. Please round to two decimal places Supply in the market for coffee is O a.more elastic than supply in the market for hot cocoa O b. the same elasticity as supply in the market for hot cocoa. c. There is not enough information to tell which has a higher elasticity. d. less elastic than supply in the market for hot cocoa.

Answers

Answer:

The elasticity of supply for hot cocoa is 1.43.

(D) Supply in the market for coffee is less elastic than supply in the market for hot cocoa

Explanation:

Using the midpoint formula,

Elasticity of supply for hot cocoa = (change in quantity supplied/average quantity supplied) ÷ (change in price/average price)

change in quantity supplied = 101 - 31 = 70

average quantity supplied = (101+31)/2 = 66

70/66 = 1.06

change in price = 9.75 - 4.5 = 5.25

average price = (9.75+4.5)/2 = 7.125

5.25/7.125 = 0.74

Elasticity of supply for hot cocoa = 1.06 ÷ 0.74 = 1.43. The supply for hot cocoa is elastic because the elasticity of supply is greater than 1.

Elasticity of supply for coffee = (73 - 31)/(73+31)/2 ÷ 0.74 = 42/52 ÷ 0.74 = 0.81 ÷ 0.74 = 1.09. The supply for coffee is elastic because the elasticity of supply is greater than 1.

However, supply in the market for coffee is less elastic than supply in the market for hot cocoa because the elasticity of supply for coffee is less than that of hot coffee.

In the advertising industry, terms such as new advertising, orchestration, and seamless communication were used to describe the concept of Group of answer choices positioning. integration. channel conflict. relationship marketing. diffusion.

Answers

Answer:

The correct answer is letter "B": integration.

Explanation:

Advertising integration refers to bundling all mediums of communication possible business can use to promote its goods or services. This strategy reinforces the firm market position by repeating its advertising message constantly creating consistency and reducing the stress of having to create a different marketing approach for each advertising channel.

Given the following data, calculate the Total Variable Cost variance. Planning Budget Actual Results Revenue $73,000 $75,000 Variable costs $23,000 $20,000 Contribution margin $50,000 $55,000 Fixed costs $15,000 $10,000 Profit before taxes $35,000 $45,000 a. $3,000 Favorable b. $3,000 Unfavorable c. $5,000 Favorable d. $5,000 Unfavorable e. $2,000 Unfavorable f. $2,000 Favorable

Answers

Answer:

a. $3,000 Favorable

Explanation:

Variable cost variance is the difference between the budgeted variable cost and actual variable cost for a period.

Use following formula to claculate the variable cost variance

Variable cost variance = Budgeted Variable cost - Actual variable cost

Placing values in the formula

Variable cost variance = Budgeted Variable cost - Actual variable cost

Variable cost variance = $23,000 - $20,000

Variable cost variance = $3,000

As the actual cost is less than the budgeted cost, so the $3,000 is saved in respect of variable cost.

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