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andrey2020 [161]
3 years ago
8

A corporation in a 40% tax bracket invests in the preferred stock of another company and earns a 5% pretax rate of return. An in

dividual investor in a 20% tax bracket invests in the same preferred stock and earns the same pretax return. The after-tax return to the corporation is ________, and the after-tax return to the individual investor is
Business
1 answer:
Allushta [10]3 years ago
4 0

Answer:

The after-tax return to the corporation is __3%______, and the after-tax return to the individual investor is 4%.

Explanation:

A. The after-tax return is the return that is earned by the corporation or individual after the deduction of income tax.  Since the corporation and the individual are in different tax brackets, you will normally expect them to earn different after-tax returns.

B. Calculation of the after-tax returns:

After-tax return = Pre-tax return minus income tax

1. Corporation = (100% - 40%) x 5% = 3%

2. Individual = (100% - 20%) x 5% = 4%

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When reporting on conditions relating to an entity's internal control observed during an audit of the financial statements, the
Alinara [238K]

Answer:

a Description of tests performed to search for material weaknesses.

Explanation:

When reporting on conditions relating to an entity's internal control observed during an audit of the financial statements, the auditor should include a Description of tests performed to search for material weaknesses.

Tests of controls may be performed to test the effectiveness of certain controls that auditors consider relevant to preventing and detecting errors and fraud that are material to the financial statements, <u>thereafter a management report must be issued to the audit committee for any deficiencies in controls to be addressed.</u> The management letter describes the tests performed and the results in each category

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3 years ago
In the classic downward-sloping demand curve, as price increases, the demand for the product or service
vesna_86 [32]
The demand for a product or service would likely decrease as price increases as far as the classic downward-sloping demand curve is concerned. In addition, this specific type of demand curve characterises increase of consumer demand as the price significantly falls. 
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3 years ago
Initial margin requirements are determined by:________
Goryan [66]

Answer:

b. the Federal Reserve System.

Explanation:

Initial margin refers to the deposit made by an investor with a broker, in order to open a margin account. The purpose of initial margin is security and collateral to ensure enough availability of cash in the trading account of the investor.

For instance an investor wants to purchase 4000 shares priced at 15$. In this case, he is supposed to deposit 50% of $60,000 i.e $30,000. The remaining $30,000 is contributed by the brokerage firm, regarded as borrowings on which the investor pays interest.

The initial margin limit is fixed by the Federal Reserve System.

3 0
3 years ago
A single database that collects data and feeds it into applications that support each of the company's business activities, such
Montano1993 [528]

Answer:

a) true

Explanation:

The Enterprise resource planning system is a single database that helps to collect data and feed into applications with a motive to support the various business activities like - purchases, production, distribution, sales, marketing, finance, human resource, information technology, etc

The aim of this system is to conduct each and every business activity in an effective and efficient manner so that each one can share the database so that tracking could be done that helps to reduce the time and cost.

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3 years ago
Rinker Audio Products has a fully-staffed purchasing department that procures various inputs. It also has various domestic manuf
Mandarinka [93]

Answer: Logistics

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