A purchase order is created by the accounting department. a. True b. False

Ordinary and necessary business expenses are deductible only to the extent they are also reasonable in amount.

marysya [2.9K]

Answer:

True

Explanation:

According to the IRS:

ordinary expenses are expenses that are common and accepted in a company's trade or industry.
necessary expenses are expenses that help your company carry on its normal business.

Tax deductible expenses must be ordinary, necessary, and reasonable.

8 0

3 years ago

You purchased 500 shares of Barden Enterprises stock for $55.43 per share at the beginning of the year. The stock is currently p

krok68 [10]

Answer:

Dividend yield is 2.91 %.

Explanation:

Dividend yield = Annual Dividend per Share / Stock Price per Share × 100

where,

Annual Dividend per Share = Total Dividends ÷ Total Number of Shares

= $835 ÷ 500

= $1.67

then,

Dividend yield = $1.67 / $57.48 × 100

= 2.905 or 2.91 %

4 0

3 years ago

Assume a major investment service has just given Oasis Electronics its highest investment rating, along with a strong buy recomm

ruslelena [56]

Answer:

Share price : $ 56.23

Explanation:

CAPM

$Ke= r_f + \beta (r_m-r_f)$

risk free = 0.05

market rate = 0.11

premium market = (market rate - risk free) 0.06

beta(non diversifiable risk) = 1.64

$Ke= 0.05 + 1.64 (0.06)$

Ke 0.14840

Now, we solve for the present value of the future dividends:

year dividend* present value**

1 2.91 2.53

2 3.31 2.51

3 3.78 2.49

4 4.31 2.48

4 80.38 46.22

TOTAL 56.23

*Dividends will be calculate as the previous year dividends tiems the grow rate

during the first four year is 14%

then, we calcualte the present value of all the future dividends growing at 9% using the dividend grow model:

$\frac{D_1}{K_e-g}$

(4.31 x 1.09) / (0.1484 - 0.09) = 80.38

Then we discount eahc using the present value of a lump sum:

$\frac{Cashflow}{(1 + rate)^{time} } = PV$

We discount using the CAPM COst of Capital of 14.84%

last we add them all to get the share price: $ 56.23

4 0

3 years ago

Lexigraphic Printing Company is considering replacing a machine that has been used in its factory for four years. Relevant data

jek_recluse [69]

Answer:

Lexigraphic Printing Company

1. Differential Analysis as of April 30:

Old Machine New Machine Difference

Annual revenue $74,200 $74,200

Annual depreciation (straight-line) 8,900 19,950

Annual manufacturing

costs, excluding depreciation 23,600 6,900

Annual nonmanufacturing

operating expenses 6,100 6,100

Total expenses $38,600 $32,950

Annual net income $35,600 $41,250 $5,650

Net income for 6 six years $213,600 $247,500 $33,900

2. Other factors that should be considered are:

B. What effect does the federal income tax have on the decision?

C. What opportunities are available for the use of the $90,000 of funds ($119,700 less $29,700 proceeds from the old machine) that are required to purchase the new machine?

E. Are there any improvements in the quality of work turned out by the new machine?

Explanation:

a) Dat and Calculations:

Old Machine

Cost of machine, 10-year life $89,000

Annual depreciation (straight-line) 8,900

Annual manufacturing costs, excluding depreciation 23,600

Annual nonmanufacturing operating expenses 6,100

Annual revenue 74,200

Current estimated selling price of machine 29,700

New Machine

Purchase price of machine, six-year life $119,700

Annual depreciation (straight-line) 19,950

Estimated annual manufacturing costs, excluding depreciation 6,900

Annual nonmanufacturing operating expenses 6,100

Annual revenue 74,200

Differential Analysis as of April 30:

Old Machine New Machine Difference

Annual revenue $74,200 $74,200

Annual depreciation (straight-line) 8,900 19,950

Annual manufacturing

costs, excluding depreciation 23,600 6,900

Annual nonmanufacturing

operating expenses 6,100 6,100

Total expenses $38,600 $32,950

Annual net income $35,600 $41,250 $5,650

Net income for 6 six years $213,600 $247,500 $33,900

4 0

3 years ago

Everything else equal, if the United States runs a large foreign trade deficit, the financing of the deficit will: a. increase g

sladkih [1.3K]

Answer: decrease tax revenue

Explanation:

A trade deficit occurs when the import of a country's is more than the export of the country for a given period of time period. The main cause is when there's an imbalance between the savings of a country and the investment rates.

In this case, financing the deficit will lead to the reduction in the tax revenue. When part of the tax revenue gotten from economic agents are used in the finance of the deficit, there'll be a reduction in the tax revenue.

6 0

2 years ago