All categories

3 years ago

What is meant by bonded warehouse?

1 answer:

5 0

<span>A bonded warehouse, or bond, is a building or other secured area in which dutiable goods may be stored, manipulated, or undergo manufacturing operations without payment of duty. It may be managed by the state or by private enterprise.

Wikipedia Definition</span>

You might be interested in

Braxton Enterprises currently has debt outstanding of million and an interest rate of . Braxton plans to reduce its debt by repa

Vika [28.1K]

Answer:

Interest tax shield in year 0 = $1.155 million

Interest tax shield in year 1 = $0.924 million

Interest tax shield in year 2 = $0.693 million

Interest tax shield in year 3 = $0.462 million

Interest tax shield in year 4 = $0.231 million

Interest tax shield in year 5 = 0

Explanation:

Here is the complete question :

Braxton Enterprises currently has debt outstanding of $55 million and an interest rate of 6%. Braxton plans to reduce its debt by repaying $11 million in principal at the end of each year for the next five years. If Braxton's marginal corporate tax rate is 35%, what is the interest tax shield from Braxton's debt in each of the next five years?

interest tax shield is a reduction in tax paid as a result of interest paid on debt

interest tax shield = (debt amount x interest rate x tax rate)

Interest tax shield in year 0 = $55 million x 0.06 x 0.35 = $1.155 million

Debt in year 1 = $55 million - 11million = $44 million

Interest tax shield in year 1 = $44 million x 0.06 x 0.35 = $0.924 million

Debt in year 2 = $44 million - 11million = $33 million

Interest tax shield in year 2 = $33 million x 0.06 x 0.35 = $0.693 million

Debt in year 3 = $33 million - 11million = $22 million

Interest tax shield in year 3 = $22 million x 0.06 x 0.35 = $0.462 million

Debt in year 4 = $22 million - $11 million = $11 million

Interest tax shield in year 4 = $11 million x 0.06 x 0.35 = $0.231 million

Debt in year 5 = $11 million - $11 million = 0

Interest tax shield in year 5 = 0 x 0.06 x 0.35 = 0

5 0

3 years ago

Increased government spending for investments such as highways or harbors financed by increasing the public debt would most like

zavuch27 [327]

Answer:

Complement private investment

Explanation:

7 0

3 years ago

Ponzi Products produced 100 chain-letter kits this quarter, resulting in a total cash outlay of $10 per unit. It will sell 50 of

vesna_86 [32]

Answer:

Explanation:

From the given information: we are to:

a) Prepare an income statement for Ponzi for today and for each of the next three quarters. Ignore taxes. (LO1)

An income statement involves depicts the achievement of a certain business over a period of time .

The income statement for Ponzi for today and for each of the next three quarters is as follows:

Quarter 1 Quarter 2 Quarter 3 Quarter 4

Sales $0 $550 $600 $0

(-)

cost of goods 0 $500 $500 $0

sold

Net income 0 $50 $100 0

We will see that in the first and the fourth quarter ; the firm neither pay any cash to purchase goods nor collect cash for sales. Thus ; the cashflow will be zero in those instances and we will consider only the second and the fourth quarter for sales income and production cost.

SO:

Quarter 2 sales = 50 × 11 = $550

Quarter 3 sales = 50 × 12 = $600

(b) What are the cash flows for the company today and in each of the next three quarters?

Cash flow is like a database that helps to keep tracks and records the cash inflows and cash outflows of a financial instrument.

The cash flow in each month is as follows:

Quarter 1 Quarter 2 Quarter 3 Quarter 4

Sales $0 $550 $600 $0

(-)

cost of goods 0 $500 $500 $0

sold

Net income 0 $50 $100 0

Inventories $1000 $500 0 0

Account

Receivables 0 550 600 0

Net working

capital $1000 $1050 $600 0

Change in WC $1000 $50 $450 $600

CashFlow $1000 $0 $550 $600

Hint:

The Cash flow = net income - change in net working capital

The net working capital = Inventory + Account receivables

Quarter 2 sales = 50 × 11 = $550

Quarter 3 sales = 50 × 12 = $600

The net working capital in each quarter can be illustrated as :

Quarter 1 Quarter 2 Quarter 3 Quarter 4

Inventories $1000 $500 0 $0

Account recei- 0 $550 $600 $0

vables

Net working $1000 $1050 $600 $0

capital

8 0

3 years ago

You live in a town with 300 adults and 200 children, and you are thinking about putting on a play to entertain your neighbors an

Serjik [45]

Answer:

Explanation:

To maximize profit, you would charge $8 for an adult's ticket and $4 for a child?s ticket. Total profit in this case would be $800.

The city council passes a law prohibiting you from charging different prices to different customers.

Now you set a price of $8 for all tickets, resulting in $600 in profit.

Indicate whether each of the following groups of people is better off, worse off, or the same because of the law prohibiting price discrimination.

Groups of People Better Off Worse Off Unchanged

Adults x

Children x

You, the Producer x

Suppose the fixed cost of the play were $2,600 rather than $2,000.

Complete the following sentences indicating how this would change your answers to the previous parts.

In the presence of price discrimination, the adult price of a ticket would remain the same, and the child price would remain the same. Total profit would fall to $200.

If price discrimination were banned and the monopolist continued to produce the play no matter what the profit, the price of a ticket would remain the same, and total profit would fall to $0.

7 0

3 years ago

Altoona Corporation has two divisions, Hinges and Doors, which are both organized as profit centers; the Hinge Division produces

alukav5142 [94]

Answer:

d. $864,000 decrease in profits.

Explanation:

Hinge Division's total cost per unit:

variable $26

fixed $17

total $43

sales price $58

contribution margin $32

profit margin $15

Alternative A Alternative B Differential

intercompany outside amount

money paid to $0 $1,696,000 ($1,696,000)

outside vendor

variable costs $832,000 $0 $832,000

<u>fixed costs $544,000 $544,000 $0</u>

total costs $1,376,000 $2,240,000 ($864,000)

If the hinges are purchased form an outside vendor, the corporation's total profits will decrease by $864,000.

3 0

3 years ago