Answer:
The formula to calculate the Budget Balance is
Government Income - Government Expenditure
in this case
$1.05 billion - $1.06 billion = -<u> 0.01 billion or - $100 million</u>
Explanation:
A budget balance is reached when a government expenditures are equal to it's income.
In this case, since the country's only source of income it is slightly less than than what is required to run the government, it has a budget deficient.
Since the country does not export or trade with outside countries, the government will need to take out a loan to make up for this deficient.
Keeping the appropriate cash flow in the cash flow register, using a financial calculator, NPV should be calculated for taking the decision.
Answer: According to the NPV calculated, Chen should buy a new machine.
<u>Explanation:</u>
Cash outflow = $40000
Increase in annual after-tax cash flows : CF = $9000
Place the cash flow on a time line:
0 1 2 10
I 10 I I . . . I
-110000 19000 19000 19000
With a financial calculator, input the appropriate cash flow into the cash flow register, input I/YR = 10, and then solve for NPV. The answer for NPV is $6746.78.
Thus, Chen should buy a new machine.
Answer:
c. $500,000.
Explanation:
Market Corporation has a basis in the land of $500,000.
We are told in the question that ''Market Corporation completely liquidates Subsidiary Corporation, receiving land with a $400,000 adjusted basis and a $500,000 Fair Market Value''
In the event of liquidation the value of an asset is no longer its carrying amount or book value but rather the amount at which the asset can be disposed which is the fair market value.
<span>The change in the stockholders' equity during the given year was $111,000. Working out the math, if you take the $132,500 reported investor equity at the beginning of the year and add the $115,000 in total revenues to that, minus the $104,500 in expenses and $39,000 in cash dividends you get $104,000. Take the total calculated assets of $215,000 at the the end of the year, subtract the difference between $215,000 and $104,000 and the answer is $111,000.</span>
