Answer:
B) proportional
Explanation:
In the case of the proportional tax structure the marginal tax rate should be equivalent to the average tax rate without considering the high level of taxable income or low level of taxable income
Therefore in the given case, the tax structure should be proportional
hence, the correct option is B
And, the same is to be considered
Answer: The advantage of the basic earning power ratio (BEP) over the return on total assets for judging a company's operating efficiency is that the BEP does not reflect the effects of debt and taxes
Explanation:
a. This is correct.
The advantage of basic earning power ratio over the return on the total assets for judging a firm's operating efficiency is that the basic earning power does not reflect effects of debt and taxes.
b. This is incorrect.
Only the price/earnings ratio of the company will tell us nothing about a company. When we compare the price/earnings of a company with the peers, we would know whether such company is under valued, or over valued or maybe fairly valued.
c. This is incorrect.
The total assets is made up of total liabilities plus the shareholders equity, when other things are held constant, less debt simply means less liabilities. To balance both sides, the total assets should reduce as the shareholder's equity is constant. When total assets decreases, the return on the assets will increase.
d. This is incorrect.
We can reach a conclusion on which firm is better managed based on the facts given. The debt ratio is the total liabilities divided by total assets, and a lower ratio is known to be good in comparison to a higher ratio. Similarly, the profit margin is the profit divided by the sales, and low profit margin shows high expenses and also a need for the management to decrease the expense.
Answer: E.) Amount created by Single Bank $20,000 and Amount Created by Banking System $100,000
Explanation:
The required reserve ratio = 20%
Checkable deposit liabilities = $500,000
Reserve = $120,000
The required reserve refers to a designated percentage of a commercial bank's deposit which is the minimum that must be held by a commercial bank. Regulation is usuay pronounced by the central bank of the nation.
Banking system loan increase :
Reserve ratio × Checkable deposit liabilities
20% × $500,000 = 100,000
Commercial bank maximum
Reserve amount - required reserve amount
$120,000 - (0.2 × 500,000)
$120,000 - $100,000 = $20,000
Answer:
He needs to deposit each year $747.38
Explanation:
Giving the following information:
To help you reach a $5,000 goal in five years from now, your father offers to give you $500 now. You plan to get a part-time job and make five additional deposits, one at the end of each year for 5 years. Your first deposit will be made at the end of the first year. The money is deposited in a bank that pays 7% interest.
First, we need to calculate the final value of the first $500 that the father gave him:
FV= PV*(1+i)^n
FV= 500*(1.07)^5=
FV= 701.28
Now, we have to calculate the annual deposit required:
Difference= 5,000 - 701.28= 4,298.72
We need to use the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
Isolating A:
A= (FV*i)/{[(1+i)^n]-1}
A= (4,298.72*0.07)/[(1.07^5)-1]
A= $747.38
Answer:
62,500 shares
Explanation:
common stock = 500,000 shares
Total shares outstanding = 40 million
Percentage of existing holding:
= (Shares of common stock ÷ Total shares outstanding) × 100
= (500,000 ÷ 40,000,000) × 100
= 1.25%
New shares that can be purchased:
= Number of new shares sold × Percentage of existing holding
= 5 million × 1.25%
= 62,500 shares
