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3 years ago

Which of the following is considered a capital asset for federal income tax purpose?

Business

1 answer:

Alex73 [517]3 years ago

5 0

Answer:

b) Land used in your business

Explanation:

For tax purposes the IRS classifies capital assets as those that have a productive life of more than one year and is not normally sold during the course of a business's operations.

Capital assets are a type of production cost, they are used in the production process to generate revenue.

They are expensed over the useful life of the asset in the form of depreciation.

Land is an example of capital assets for the purpose of federal income tax.

It provides the site of production and is not an item that is sold in the short run. Rather it is used over several years.

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What is the difference between an "increase in demand" and an "increase in quantity demanded"?

alekssr [168]

A shift to the right of the demand curve signifies a "increase in demand," whereas movement along a particular demand curve signifies a "increase in quantity demanded." The correct response is option (B).

<h3>What is increase in demand?</h3>

A rise in demand will cause a rise in the equilibrium price and an increase in supply, all other things being equal. Reduced demand will result in a decrease in the equilibrium price and an increase in supply.

An rise in the quantity needed results from a decrease in the cost of the good (and vice versa). A demand curve depicts the amount desired and any market price. A change in quantity demanded is represented as a shift along a demand curve.

To know more about increase in demand, visit:

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6 0

1 year ago

The market value of Fords' equity, preferred stock, and debt are $ 7 billion, $ 2 billion, and $ 13 billion, respectively.

Alisiya [41]

Answer: 9.48%

Explanation:

Given Data

Debts ;

$7 billion

$2 billion

$13 billion

Beta of Fords stock = Beta = 1.50

Market risk premium = Rp = 8.0%

Risk free rate of interest = Rf = 4.0%

Equity rate = 1.7

Market risk rate = 0.8

Risk free rate = 0.03

Therefore;

Cost of Equity ( Re ) = Risk free rate + equity rate × market risk premium

= 0.03 + (1.7 × 0.8)

= 0.166

Preferred Stock Cost ( PSC)= Dividend ÷ stock price

= 4 ÷ 30

= 0.1333

Total debt = 13 + 6 + 2 = 21 billion

D% = 13 billion ÷ 21 billion

= 0.619

E% = 6 billion ÷ 21 billion

= 0.286

P% = 2 billion ÷ 21 billion

= 0.095

RD = debt capital at 8% maturity rate

Tc= 30%

Rwac =(w/ preferred stock)

= Re × E% + PSC × P% + Rd ( 1- Tc) D%

Rwac = (0.166)(0.286) + (0.1333)(0.095) + (0.08)(1- 0.3)*(0.619)

= 0.094803 * 100

= 9.48%

At 30% tax rate Ford weighted average cost is 9.48%

4 0

3 years ago

Roy Gross is considering an investment that pays 7.60 percent. How much will he have to invest today so that the investment will

Reptile [31]

Answer:

He has to invest $16,803.32 so that the investment will be worth $27,000 in six years with a 7.6% interest rate.

Explanation:

Year 6: 27,000

Year 5: 27,000 - (27,000 x 7.6 / 100) = 27,000 - 2,052 = $24,948

Year 4: 24,948 - (24,948 x 7.6 / 100) = 24,948 - 1,896.05 = $23,051.95

Year 3: 23,051.95 - (23,051.95 x 7.6 / 100) = 23,051.95 - 1,751.95 = $21,300

Year 2: 21,300 - (21,300 x 7.6 / 100) = 21,300 - 1,618.80 = $19,681.20

Year 1: 19,681.20 - (19,681.20 x 7.6 / 100) = 19,681.20 - 1,495.77 = $18,185.42

Year 0: 18,185.42 - (18,185.42 x 7.6 / 100) = 18,185.42 - 1,382.10 = $16,803.32

6 0

3 years ago

Dee's made two announcements concerning its common stock today. First, the company announced that the next annual dividend will

anzhelika [568]

Answer:

The price per share today is a.$9.49

Explanation:

The value of the stock today can be calculated using the constant growth model of the DDM. The constant growth model is applicable when dividend are growing at a constant rate forever. the growth rate here is negative thus g will be -1.15%

The formula for Constant growth model is,

Price = D1 / r - g

Using the formula, we calculate the price per share today to be:

Price = 1.58 / (0.155 + 0.0115)

Price = $9.49

5 0

3 years ago

You are considering how to invest part of your retirement savings.You have decided to put $400,000 into three stocks: 61% of th

Vikki [24]

Answer:

a. Number of shares of GoldFinger = 61%*400000/24

Number of shares of GoldFinger = 10166.6667

Number of shares of Moosehead = 24%*400,000/73

Number of shares of Moosehead = 1315.0685

Number of shares of Venture Associates = (1 - 61% - 24%) * 400,000/9

Number of shares of Venture Associates = 15% * 400,000/9

Number of shares of Venture Associates = 6666.6667

New value of the portfolio = 10166.6667*$43 + 1315.0685*$67 + 6666.6667*$6

New value of the portfolio = $437,166.6681 + $88,109.5895 + $40000.0002

New value of the portfolio = $565,276.2578

b. The return that the portfolio earn is = ($565,276.2578 - $400,000) / $400,000 = $165,276.2578 / $400,000 = 0.4131906445 = 41.32%

c. Weight of Goldfinger is now = (10166.6667*$43) / $565,276.2578

= $437166.6681 / $565,276.2578

= 0.7734

= 77.34%

Weight of Moosehead is now = (1315.0685*$67) / $565,276.2578

= $88109.5895 / $565,276.2578

= 0.15587

= 15.59%

Weight of Venture is now = 100% - 77.34 - 15.59%

= 7.07%

5 0

3 years ago