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3 years ago

Which of the following scenarios is consistent with the Laffer curve?

Business

1 answer:

sergejj [24]3 years ago

3 0

Answer:

No option is correct.

a. An increase in the tax rate always increases tax revenue. ⇒ FALSE, if tax rates increase beyond the optimal level, instead of increasing total revenue they will decrease it.
b. The tax rate is 1 percent, and tax revenue is very high. ⇒ FALSE, very low tax rates will result in very low government revenue.
c. The tax rate is 99 percent, and tax revenue is very high. ⇒ FALSE, very high tax rates will result in very low government revenue.
d. A decrease in the tax rate always increases tax revenue. ⇒ FALSE, if tax rates decrease beyond the optimal level, instead of increasing total revenue they will decrease it.

Explanation:

According to Arthur Laffer, a direct and sometimes inverse relationship exists between tax rates and government revenue. Sometimes a lower tax rate can result in higher government revenue. But that is not always the case. Sometimes an increase in the tax rate can increase government revenue. The optimal tax rate (T*) is equal to the tax rate that will allow the government to collect the highest amount of revenue. Any lower or higher tax rate will decrease government revenue.

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Pet World is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's IRR c

Len [333]

Answer:

C) 2.57%

Explanation:

Pet World's net cash flows:

0 -$9,500

1 $2,000

2 $2,025

3 $2,050

4 $2,075

5 $2,100

In order to find the rate of return we can use an excel spreadsheet and the IRR function =IRR (values,[guess]) =IRR (-9500,2000,2025,2050,2075,2100)

=IRR = 2.57%

3 0

2 years ago

Fax machines, voice mail, electronic mail, and electronic conferencing are all examples of

snow_tiger [21]

They are forms of Communication.

5 0

2 years ago

Rodriguez Company pays $310,000 for real estate plus $16,430 in closing costs. The real estate consists of land appraised at $21

Sergeeva-Olga [200]

Answer:

Required 1.

Land = $163,215

Land improvements = $65,286

Buildings = $97,929

Required 2.

Land $163,215 (debit)

Land improvements $65,286 (credit)

Buildings $97,929 (credit)

Cash $310,000 (credit)

Explanation:

Allocation of the purchase cost must be made on the bases appraisal value.

Total Appraisal Value = $215,000 + $86,000 + $129,000

= $430,000

Land = $215,000 / $430,000 × $326,430

= $163,215

Land improvements = $86,000 / $430,000 × $326,430

= $65,286

Buildings = $129,000 / $430,000 × $326,430

= $97,929

6 0

3 years ago

In considering ending her relationship with her husband, Marie considers how they might divide up their household goods, and how

iren [92.7K]

Answer:

D) investment

Explanation:

Marie has decided to end her relation with her husband and considering how she can divide the household goods, how the end of the relationship impacts her children. By considering all this point, Marie is thinking about the investment.

Interdependence theory state that interpersonal relationships depend upon interdependence. it determine the how people interact each other and what will be the outcomes of their interaction.

6 0

3 years ago

Maso Company recorded journal entries for the issuance of common stock for $200,000, the payment of $65,000 on accounts payable,

cricket20 [7]

Answer:

Increase of $95,000

Explanation:

Stockholder equity: It records the issue of shares, retained earnings, and deduct the dividend amount if declared.

The expenses which are related to the business is directly or indirectly affect the stockholder equity.

So, the net effect is shown below:

Issuance of common stock = $200,000

Less - Payment of salaries expense = $105,000

So, the net effect would be equal to

= $200,000 - $105,000

= $95,000

The accounts payable does not affect stockholder equity. So, it would not be considered.

This $95,000 would increase stockholder equity.

7 0

3 years ago