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insens350 [35]
3 years ago
15

A stationery company plans to launch a new type of indelible ink pen. Advertising for the new product will be heavy and will cos

t the company $ 12 ​million, although the company expects general revenues of​ $280 million next year from sources other than sales of the new pen. If the company has a corporate​ tax-rate of 40​% on its pretax​ income, what effect will the advertising for the new pen have on its​ taxes?
Business
1 answer:
qaws [65]3 years ago
7 0

Answer:

$4.8 million reduction

Explanation:

Given that

Cost to the company = $12 million

Expected to generate revenues next year = $280 million

Corporate tax rate = 40%

Based on the above information, the effect would be

The cost to the company is treated as an expense and therefore it is deducted from the revenue. Moreover, there is a reduction of $4.8 million i.e come from

= $12 million × 40%

= $4.8 million

This amount is shown reduction in taxes

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Present Value of an Annuity of 1 Periods8%9% 10.926 0.917 0.909 21.783 1.759 1.736 32.577 2.531 2.487 A company has a minimum re
Bogdan [553]

Answer:

d. $197,418

Explanation:

Profitability index for this project = Present value of cash inflows / Present value of cash inflows

Profitability index for this project = 2.531*$78000 / $195000

Profitability index for this project = $197,418 / $195,000

Profitability index for this project = 1.0124

So, the net present value of this project is $197,418

8 0
3 years ago
Management of Lewallen Corporation has asked your help as an intern in preparing some key reports for September. Direct material
madreJ [45]

Answer:

The prime cost for september is $100,000.

Explanation:

prime cost = Direct material cost + Direct labour cost

                  = $57,000 + $43,000

                  = $100,000.

Therefore, the prime cost for september is $100,000.

7 0
3 years ago
On January 1, Year 1, Miller Company purchased equipment for $36,000. Residual value at the end of an estimated six-year service
Kay [80]

Answer:

1. $8,000

2. $20,000

3. $16,000

Explanation:

The computation is shown below using the double-declining balance method:

First we have to find the depreciation rate which is shown below:

= One ÷ useful life

= 1 ÷ 6

= 0.16667

Now the rate is double So, 0.3333%

In year 1, the original cost is $36,000, so the depreciation is $12,000 after applying the 33.33% depreciation rate

And, in year 2, the ($36,000 - $12,000) × 33.33% = $8,000

1. So the depreciation expense is $8,000

2. Accumulated depreciation is

= $12,000 + $8,000

= $20,000

3. And, the book value is

= $36,000 - $20,000

= $16,000

5 0
3 years ago
A family spends $46,000 a year for living expenses. If prices increase 3 percent a year for the next three years, what amount wi
lozanna [386]

Answer:

$50,265

Explanation:

The computation of the living expenses after three years are shown below:

Given that

Living expenses per year = $46,000

Number of years it increases = Three years

So, the amount of living expenses after three years is

= Living expenses per year × (1 + percentage increase)^number of years

= $46,000 × (1 + 0.03)^3

= $46,000 × 1.092727

= $50,265

5 0
3 years ago
A budget line shows the
blagie [28]

Answer: A budget line shows the quantities of goods a buyer can purchase with given income and prices.

Explanation: A budget line also known as a budget constraint can be defined as the value of exports to import ( for a state) or the value of expenditure to income (for an individual).

It basically explains the summary of intended expenditure with the capital and the prices.

8 0
3 years ago
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