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Tasya [4]
3 years ago
14

Brandon and jane forte file a joint tax return and decide to itemize their deductions. the forte's income for the year consists

of $120,000 in salary, $1,000 interest income, $1,500 nonqualifying dividends, and $1,000 long-term capital gains. the forte's expenses for the year consist of $3,000 investment interest expense and $900 tax preparation fees. assuming that the forte's marginal tax rate is 30%, what is the amount of investment interest expense deduction for the year?
Business
1 answer:
netineya [11]3 years ago
8 0
The interest income for the year is $1000. The investment interest expense is $ 3000. As per the provision the investment income expenses deduction is allowed to the extent of investment income. The amount which could not be deducted can be carried forward for next year. So the investment interest expenses allowed as deduction is limited to $1000 for Forte for the year. Since the dividend income is non qualifying income no expense is allowed on such income.
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Great Subs Inc., a regional sandwich chain, is considering purchasing a smaller chain, Eastern Pizza, which is currently finance
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Answer:

WACC 13.85600%

Explanation:

First we calculate Eastern Pizza CAPM:

Ke= r_f + \beta (r_m-r_f)

risk free = 0.08

market rate = 0.12

premium market = (market rate - risk free) 0.04

beta(non diversifiable risk) = 2

Ke= 0.08 + 2 (0.04)

Ke 0.16000

Then we solve for WACC

WACC = K_e(\frac{E}{E+D}) + K_d(1-t)(\frac{D}{E+D})

Ke 0.16000

Equity weight 0.8

Kd 0.08

Debt Weight 0.2

t 0.34

WACC = 0.16(0.8) + 0.08(1-0.34)(0.2)

WACC 13.85600%

The company will use the data on eastern Pizza to evualuate project presented to it. Also, it will  consider the new tax rate to determinate the tax shield.

3 0
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Suppose in its income statement for the year ended June 30, 2017, The Clorox Company reported the following condensed data (doll
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The answer & explanation for this question is given in the attachment below.

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Answer:

d. the complex set of ideologies, symbols, and core values that are shared throughout the firm.

Explanation:

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Answer:

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Explanation:

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