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1 year ago

other things held constant, the lower a firm's tax rate, the more logical it is for the firm to use debt. true false

1 answer:

8 0

The tax shelter from debt is less valuable as the lower the tax rate. Consider the WACC's debt service costs: rd (1-Tax rate). The cost of debt is not reduced as much when the Tax rate is low as it is when the Tax rate is high. hence, the given statement is False.

The tax rate in a tax system is the proportion at which a company or individual is taxed. Statutory, average, marginal, and effective tax rates are just a few of the ways that can be displayed.

Hence, The cost of debt is not reduced as much when the Tax rate is low as it is when the Tax rate is high. hence, the given statement is False.

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The following expenditures relating to plant assets were made by Prather Company during the first 2 months of 2020. Opposite eac

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Answer: Please refer to Explanation

Explanation:

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EQUIPMENT ACCOUNT as it is part of Acquisition Cost.

3.Paid $850 sales taxes on new delivery truck.

EQUIPMENT ACCOUNT as it is again part of Acquisition Cost.

4.Paid $17,500 for parking lots and driveways on new plant site.

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5.Paid $250 to have company name and advertising slogan painted on new delivery truck.

EQUIPMENT ACCOUNT as it is a cost of setting the PPE up.

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EQUIPMENT ACCOUNT as this expense is again part of setting the equipment up.

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PREPAID INSURANCE because this is a periodic cost and those are not capitalized as they provide only a short term benefit.

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2 years ago

Contracts are a form of private law because the terms contained within a contract bind the relevant parties, not the public as a

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Answer:

The correct answer is the option A: True.

Explanation:

To begin with, the contracts inside the law are regulated by the Anglo-America common law that defines a contract as the agreement between two or more parties in which they establish the basis and principles of the agreement and the clauses that could cause to end the contract. Moreover, a contract is also part of the civil law and therefore that it does not implicate the public as a whole in any way due to the fact that in order to be a correct contract the parties must accept the bond between only them and nobody else.

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3 years ago

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(D) decrease revenues and decrease assets

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Since the revenue is unearned, its entry in the books needs to be reversed.

When a revenue was recorded in the books, the like journal entry would have been.

Debit Cash/Bank/Receivables Account (thus increasing asset)

Credit Revenue Account (thus increasing revenue)

There, reversing the entry will involve decreasing revenue and decreasing asset.

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3 years ago

In the context of the skills that good managers should possess, which of the following statements is true of managers with a mot

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Explanation:

bcoz they want to motivate the employees to

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2 years ago

Economists expect the firm to maximize __________, the laborer to accept the best __________, and the consumer to find the combi

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Answer:

The correct answer is option d.

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2 years ago

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