The solution for this problem is get first the total sales, credit sales and receivables turnover.
187,000 / 0.086 = $2,174,418 this is your total sales
2,174,418 x 60% = $1,304,651 is your credit sales
1,304,651 / 126,370 = 10.32 times is the Receivables turnover
365 / 10.32 = 35.37 days is the day's sales in receivables
Answer:
A) lower income tax rates could increase tax revenues.
Explanation:
The laffer curve is a theoretical model which argues that there a tax rate that theoretically produces the most revenue for the government. Said tax rate is between 0% and 100%.
President Reagan used this model to argue that a lower tax rate would actually increase government revenue. The logic behind this claim was that lower tax rates increases both public and private saving, which in turn increases investment, resulting in more economic growth, and more taxable income.
The validity of these claims is dispute and is subject to debate among economists.
Answer:
The net impact on the income will be 2,795,000 each year
Explanation:
The purchase will generate the followng:
4.3 depreciation expense
and a tax shield, as this expense decrease the net income:
depreciation x tax-rate = tax-shield
4.3 x 35% = 1.505 millions
total impact on net income:
depreciation expense - tax shield
4.3 - 1.505 = 2.795 millions net impact
