A step lease covers the landlord's expected increases in expenses by increasing the rent on an annual basis over the life of the agreement.
Companies use the production function to determine the optimal combination of labor and capital to produce a certain amount of out put. increasing marginal costs can be identified using the production function.
Answer:
Long-term capital gain = $73,000
Explanation:
The long-term capital gain (LTCG) can be calculated using the following formula:
Long-term capital gain = Selling price - Cost of acquisition - Cost of improvement .............. (1)
Where;
Selling price = $212,000
Cost of acquisition = $113,000
Cost of improvement = $26,000
Substituting the values into equation (1), we have:
Long-term capital gain = $212,000 - $113,000 - $26,000 = $73,000
Note:
Since no information on cost inflation index is given in the question, that implies that there is no need to use indexed cost of acquisition and indexed cost of improvement in our calculation. Therefore, the Cost of acquisition and Cost of improvement has to be used as given in the question.
Answer:
30%
Explanation:
We have to have three defined concepts:
Sales revenues (SR): This is the income generated by selling a product/service.
Production costs (PC): The costs of producing say product/service that we are offering to the market.
Operating profits (OP): This are the profits generated by the operationg of our business.
With those concepts in mind we need to find the Operating profits for each year so we can found the percent changes in the operating profits.
OP = SR - PC
2016 - OP (2016) = 800,000 - 600,000 = 200,000
2017 - OP (2017) = 900,000 - 640,000 = 260,000
Now we calculate the expectend increase using the percent change (%C) formula:
%C =
Replacing:
%C =
Our initial value is the OP of 2016 and our final value is the OP of 2017, so the OP for 2017 are expected to increase by a 30%.