Fran was transferred from Phoenix to Atlanta She sold her Phoenix residence (adjusted basis of $250,000) for a realized gain of
$50,000 and purchased a new residence in Atlanta for $375,000 Fran had owned and lived in the Phoenic residence for 6 years What is Fran's recognized gain or loss on the sale of the Phoenix residence and her basis for the residence in Atlanta?
A. $0 recognized gain/loss; $375,000 basis
B. $0 recognized gain/loss $425,000 basis
C. ($50,000) recognized loss; $325 000 basis
D. ($50,000) recognized loss; $375,000 basis
A. $0 recognized gain/loss; $375,000 basis
B. $0 recognized gain/loss $425,000 basis
C. ($50,000) recognized loss; $325 000 basis
D. ($50,000) recognized loss; $375,000 basis
1 answer:
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Answer:
The answer is "Option 4".
Explanation:
The Herfindahl-Hirschman Index formula:
here sn is the firm n's share of the market proportion represented the society in general number instead of a decimal
Index Herfindahl-Hirschman:
Index Herfindahl-Hirschman(Result of the merger, firms with profit margins of 6% and 5% provided market shares of respectively).
The market with just an HHI of less than 1,500 is called a competitive industry, one on an HHI of 1,500 to 2,500 is called a moderately competitive store, and one on an HHI of 2,500 or higher is considered a highly potent store by us Justice department.
All businesses operate in a moderately crowded market, as well as a merger such as this reduces competition (increases chances of monopoly). Also as result, the Justice Dept may examine its merger but will most likely deny this because the Herfindahl-Hirschman index has risen.
