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Rama09 [41]
1 year ago
15

Assume that Microsoft has no debt, a total market value of $300 billion, and a marginal tax rate of 21%. If it permanently chang

es its leverage from no debt by taking on new debt in the amount of 13% of its current market value, what is the present value of the tax shield it will create
Business
1 answer:
Sphinxa [80]1 year ago
5 0

The presence value of tax shield is =522,000,000

<h3>What is Tax shield?</h3>

Tax shields is calculate by substraction cash flow form two different sessions.

To determine the present value for first session

Market value = $300 billion

Tax rate = 20%

Debt = 0

Tax payable= Tax rate/100% * Market Value

Tax payable = 20/100× $300 billion

= 600,000,000

To get present value of tax

Market value = $300 billion

Tax rate = 20%

Debt = 13% of $300 billion

= 390,000,000

Present Market Value = $300 billon - 390,000,000

= 2,610,000,000 i.e $2.6billion

Tax payable = 20/100 × $2.6 billion

=522,000,000

Learn more on tax shield here,

brainly.com/question/13932912

#SPJ1

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One of the departments at Yolo Industries has entered into a 9 year lease for a piece of equipment. The annual payment under the
Darya [45]

Answer:

PV= $22,677.03

Explanation:

Giving the following formula:

Number of periods (n)= 9 years

Annual payment (A)= $3,800

Discount rate (i)= 12%

<u>First, we will calculate the future value of the payments using the following formula:</u>

FV= {A*[(1+i)^n-1]}/i + {[A*(1+i)^n]-A}

FV= {3,800*[(1.12^9) - 1]} / 0.12 + {[3,800*(1.12^9)] - 3,800}

FV= 56,147.49 + 6,737.7

FV= $62,885.19

<u>Now, the present value:</u>

PV= FV / (1 + i)^n

PV= 62,885.19 / (1.12^9)

PV= $22,677.03

5 0
3 years ago
Jack offers to sell Jill his automobile for $10,000. Jill says she must think about but that she is not rejecting his offer. Jil
wel

Answer:

The sale of the car is canceled

Explanation:

For two reasons I think this. Jack had already sent out a letter to jill stating that the car is no longer for sale. As the current owner of the vechile he has the right at any point in time to draw out of the deal up till the actual signing over of the car.  

3 0
3 years ago
You are sitting around the fire at a lodge in Dillingham, Alaska, discussing a fishing expedition you are planning with your col
maw [93]

Solution :

Risk management first involves the identification of the potential risk that may be involved. It should focus both on the objectives as well as events that could cause the consequences.

Some of the major risks that can be involved are :

• sudden weather conditions which may not support the flight travel.

• Embargo on fishing by the State or local authority suddenly

• any kind of physical injury to the members of the group

• there may be forest fire around the lake

• technical error that might occur during the course of adventures

The impact for the risk that includes the majuere risk will be very high for all the parameters that can increase the cost by 40%, it can also lead to increase in time by about 20% which can cancel the expedition. . These types of risk will not be covered under any scope.

For the physical risk, the impact will be moderate for the parameters.

                            Risk Response Matrix

Risk         Response        Contigency plan         Trigger     Who is responsible

Force        Mitigate      Choosing another      Situation is               Nils

Majuere                        destination as a back  not clear in

                                        up.                               24 hours.

Physical   Mitigate      Proper training and     After observing       Eddie

injury                           safety kits                     the participants

7 0
2 years ago
Pete the Pizza Man produced $87,000 worth of pizzas in the past year. He paid $39,000 to employees, paid $11,000 for vegetables
Ne4ueva [31]

Answer:

$133,000

Explanation:

We can find Pete's total contribution to GDP by adding up the following numbers:

$87,000 worth of pizzas - because finished goods are part of GDP

$39,000 paid to employees - because wages are part of GDP

$5,000 paid in taxes - taxes are part of GDP because they are government revenue

$2,000 of inventories at the end of year - end-of-year inventories are included in GDP

Therefore: $87,000 + $39,000 + $5,000 + $2,000 = $133,000

the $11,000 worth of ingredients are not included in GDP because GDP only accounts for finished goods and services.

5 0
3 years ago
Cotton Brokers, Inc., enters into a contract to sell denim clothing to Delite Natural Fashion store, which in turn sells a pair
sergiy2304 [10]

Answer:

B

Explanation:

In comparison to standards that apply to consumers, the UCC imposes on merchants Special business standards.

3 0
3 years ago
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