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Otrada [13]
3 years ago
9

Assume that John's marginal tax rate is 40%. If a city of Austin bond pays 6% interest, what interest rate would a corporate bon

d have to offer for John to be indifferent between the two bonds?
A. 30%
B. 10%
C. 6%
D. 3.6%
E. None of these
Business
1 answer:
Lisa [10]3 years ago
5 0

Answer:

B. 10%

Explanation:

Given that

Tax rate = 40%

Net tax rate = 6%

Recall that

Gross interest = Net of tax rate / ( 1 - tax rate)

Therefore,

= 0.06 ÷ ( 1 - 0.40)

= 0.06 ÷ 0.60

= 0.1

= 10%

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What are you paying for when you lease a car? A.the purchase price of the car
N76 [4]

Answer:

D

Explanation:

when you lease a vehicle, your monthly payment will be calculated based on the vehicle's depreciation, or the change between its current value and its value at the end of the lease obviously plus interest and fees. .

5 0
3 years ago
Equipment purchased at the beginning of the fiscal year for $150,000 is expected to have a useful life of 5 years, or 15,000 ope
CaHeK987 [17]

Answer:

(a). Depreciation for 1st year= $24,000

Depreciation for 2nd year= $24,000

(b). 1st Year Depreciation = $20,000

for 2nd year depreciation = $26,000

(c) 1st year Depreciation= $60,000

2nd year Depreciation = $36,000

Explanation:

a).

Annual Depreciation of Equipment = (Cost of Equipment - Residual Value) ÷ Useful Life of Equipment

= ($150,000 - $30,000) ÷ 5

= $24,000

Rate of Straight Line Depreciation = Annual Depreciation of Equipment ÷ (Cost of Equipment - Residual Value) × 100

= 24,000 ÷ ( $150,000 - 30,000) × 100

= $24,000 ÷ $120,000 × 100 = 20%

Depreciation for 1st year= $24,000

Depreciation for 2nd year= $24,000

b). Unit Of Production For 1st Year Depreciation= (Cost Of Equipment -Residual Value) × Annual Production Units ÷ Total Operating Hours

= ($150,000 - $30,000) × 2,500 ÷ 15,000 = $20,000

Unit of Production for 2nd year depreciation = ( $150,000 - $30,000) × 32,50 ÷ 15,000

= $26,000

c). Declining Balance Depreciation Rate = Straight Line Depreciation Rate × 2

= 20% × 2 = 40%   (Because Declining Balance at Twice the Straight Line Rate)

1st year Depreciation= $150,000 × 40÷100 = $60,000

2nd year Depreciation = ($150,000 - $60,000) × 40÷100 =$36,000

8 0
3 years ago
Dyan, the owner of expert restoration services, inc., adheres to the "principle of rights" theory. under this theory, a key fact
gulaghasi [49]

Affects the rights of others.

The principal of rights theory says individuals should have the maximum freedom and rights and those are only limited if the rights would infringe on rights of other people

4 0
3 years ago
Read 2 more answers
Suppose that the Federal Reserve decides to increase the money supply with a $300 purchases of Treasury bills. Complete the tabl
shutvik [7]

A $ 300

B $ 300

C $ -300

D $ 300

Treasury bills are assets and the monetary base is a liability.

<u>Explanation:</u>

To increase the money supply in the economy, the federal reserve should buy the treasury bills and this will increase the money supply in the economy, leading to more demand in the economy and therefore there will be growth and development of the economy.

With the increase in the purchase of the treasury bills by the federal reserve, the money supply will increase by $300.

4 0
3 years ago
Deb has found it very difficult to repay her loans. Because of these difficulties, the bank decided to forgive one of her most r
sergejj [24]

Answer:

$15,000

Explanation:

Total Assets-Remaining liabilities=Solvency

$232,000-$217,000=$15,000

If the waiver of loan makes the taxpayer solvent,then the extent by which he is solvent will be included in his/her gross income.

6 0
3 years ago
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