GDP is the sum of all final goods and services produced by an economy in a given period. In calculating GDP only the final goods and services that are traded are accounted for. Thus, household services that do not generate income are not accounted for in GDP, only productive activities. Therefore, in the long run the tendency is that the GDP analyzed by this issue will decrease, because when the unemployment rate increases, fewer workers will be employed in the productive sector. These people may substitute work for leisure or household chores, but this will not count in GDP.
The transaction effect on the global cleaning service's accounting equation is to increase both assets and equity by $180.
An asset is a property or an equipment that is purchased for the purpose of business activities, examples of business assets include cash, equipment, buildings and inventory to vehicles and office furniture. In this case assets worth $180 increased (may be cash or bank, depending on the means of payment) and also an increase in equity.
Answer:
business or person that carries out work for a company as part of a larger project.
Explanation:
A hun
Answer: Income statement.
Explanation:
Also known as the profit and loss account, the income statement is a financial record that shows the amount of money that a business establishment receives and spends during a certain period (week, month or year). The profit or loss is determined by subtracting the expenses from the income during a period.
100%Equity
<span>---------------------------- </span>
<span>EBIT: $200,000 </span>
<span>Interest: $0 </span>
<span>Taxes: ($80,000) </span>
<span>EAT: $120,000 </span>
<span>Equity: $1,000,000 </span>
<span>ROE12.0% </span>
<span>50% Debt </span>
<span>-------------- </span>
<span>EBIT: $200,000 </span>
<span>Interest: ($40,000) </span>
<span>Taxes: ($64,000) </span>
<span>EAT: $96,000 </span>
<span>Equity: $500,000 </span>
<span>ROE: 19.2% </span>
<span>This is my thought and is contingent on interest expense being tax deductible to the corporation. </span>
<span>Under the equity scenario. Taxes are $80,000 or 40% of $200,000 which is 20% of the $1mm asset base. So the $120,000 earnings after tax divided by the $1mm base is 12% </span>
<span>With 50% leverage, you deduct $40,000 (8% of $500,000 financing) and taxes on remaining amount. The new equity base is smaller at $500,000 so the ROE is higher at 19.2%.</span>
