. ________ refers to a marketing strategy in which the firm develops both the product and its marketing to evoke a distinct impr
1 answer:
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Explanation:
It is given that in the market there are four equal-sized firms that produce similar products. The market is saturated such that 10% industry-wide price rise would lead to 18% decline in units sold by all firms in the industry. Going further, there is a proposed legislation that imposes a tariff on a key input used by the industry, which on realization would result in the increase in marginal cost by $2.
This means that the market elasticity of demand is:
[ FIND THE ATTACHMENT FOR SOLUTION]
Answer:
$58,500
Explanation:
The outside basis is defined as the tax basis that a partner has on the partnership. To find it, the value of all the resources contributed by the partner is taken and the debt relief and any debt assigned is subtracted. To solve this exercise, we should follow these steps:
1. Determine the contributed capital.
According to the problem statement, Brett provided cash ($ 9,500) and a building (here the value of the adjusted base, $ 39,000, is taken). Therefore, the total contributions are $48,500.
2. Calculate capital increases.
The partnership obtained a loan for $59,000, which was shared equally among the partners. Therefore, Brett received 50%, that is, $29,500.
Now, we must add the contributed capital plus capital increases:
3. Calculate mortgage debt issues.
The nonresource mortgage is 44,000, a value that exceeds the basis of the contributed property. In that case, the surplus is taxed to the contributing partner. To determine it, simply subtract the nonresource mortgage less adjusted basis of the building:
On the other hand, the remaining mortgage on the building is calculated, by dividing the value of the adjusted base of the property, in this case, 39,000 by 2, which results in 19,500.
Therefore, mortgage debt issues are equivalent to:
We add the contributed capital plus capital increases plus mortgage debt issues:
4. Subtract debts.
The partnership assumes the nonrecourse mortgage (which is computed as a debt) for 44,000. Because this component is not covered entirely by Brett, then this amount must be deducted from his individual tax base.
Therefore:
58,500 is Brett´s outside tax basis in his LLC interest.
On a balance sheet, we can see it as follows:
Particulars Amount in $
Cash 9,500
+Adjusted basis of the 39,000
building
+50% profit sharing ratio 29,500
+Nonrecourse mortgage 5,000
less adjusted basis
+Remaining mortgage on 19,500
building
TOTAL 102,500
-Debt on building (44,000)
Outside tax basis 58,500