Answer:
D. The tax cut can be categorized as fiscal policy and the lowering of interest rates can be categorized as monetary policy.
Explanation:
Fiscal policy is when the government uses either taxes or government spending to influence the economy.
Contractionary fiscal policy is when the government increases taxes or reduces spending.
Expansionary fiscal policy is when the government decreases taxes or increases spending.
Monetary policy are policies enacted by central bank of a country to control money supply or interest rest.
Contractionary monetary policy is reducing money supply or increasing interest rates.
Expansionary monetary policy is increasing money supply or decreasing interest rate.
I hope my answer helps you.
Answer:
a. Traditional Income Statement
Sales ($125 x 140) $17,500
Cost of Sales ($60 x 140) <u>($8,400)</u>
Gross Profit $9,100
Salaries ($1,300)
Rent ($1,000)
Sales Commission ($17,500 x 5%) <u>($875) </u>
Net income <u>$5,925</u>
b. Contribution Margin Income Statement
Sales ($125 x 140) $17,500
Less: variable Costs
Cost of Sales ($60 x 140) ($8,400)
Sales Commission ($17,500 x 5%) <u>($875) </u>
Contribution Margin $8,225
Less: Fixed Costs
Salaries ($1,300)
Rent <u>($1,000)</u>
Net income <u>$5,925</u>
Explanation:
a.
Traditional Income statement calculates the gross profit after deducting the cost of goods sold from the revenue. After that it deduct all the operating expenses to calculate the Net Income.
b.
Contribution margin income statement consider all the variable expenses as cost of product cost and calculates the contribution margin, after that the fixed costs are deducted calculate the net income.
Answer:
The correct answer is $1,836,742.42.
Explanation:
According to the scenario, the given data are as follows:
EBIT = $373,000
Cost of equity = 13.2%
Tax rate = 35%
So, we can calculate the unlevered value of the firm by using following formula:
Unlevered value of the firm = EBIT × (1 - TAX RATE) ÷ COST OF EQUITY
By putting the value, we get
Unlevered value of the firm = $373,000 × ( 1 - 35%) ÷ 13.2%
= $373,000 × 0.65 ÷ 0.132
= $242,450 ÷ 0.132
= $1,836,742.42
Answer:
$84,500
Explanation:
Data provided as per the question
Net income = $85,000
Depreciation expenses = $1,500
Accounts receivables = $3,000
Increase in accounts payable = $1,000
The computation of amount of cash provided by operating activities is given below:-
Amount of cash provided by operating activities = Net Income + Depreciation expenses - Accounts receivables + Increase in accounts payable
= $85,000 + $1,500 - $3,000 + $1,000
= $84,500
Therefore, for computing the Amount of cash provided by operating activities we simply applied the above formula.
