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sattari [20]
3 years ago
10

Elen holds 1,000 shares of fizbo inc. stock that she purchased 11 months ago. the stock has done very well and has appreciated $

20/share since helen bought the stock. when sold, the stock will be taxed at capital gains rates (the long-term rate is 15 percent and the short-term rate is the taxpayer's marginal tax rate). ignore the time value of money.
Business
1 answer:
mestny [16]3 years ago
6 0

Answer:

Question option include: a. if Helen's marginal tax rate is 35 percent, how much would she save by holding the stock an additional month before selling? b. what might prevent Helen from waiting to sell?

Solution

Per share increase in price = $20

No of shares = 1000

Total capital gain = 1000 * $20 = $20,000

Tax rate if hold for one year more = $20,000 * 15% = $3,000

If sold immediately and taxed as short term capital gain, then  = $20,000 * 35% = $7,000  

So if shares are held for more than a month a tax of {($7000 - $3000) = $4,000} can be saved.

b  In a month shares prices may fall and capital appreciation would be reduced and this will increase the risk associated with the investment and she will not to wait for the liquidity for a month more.

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Answer:

Second-degree price discrimination.

<h3>Explanation:</h3>
  • Second-degree price discrimination occurs when a company charges a different price for different quantities consumed, such as quantity discounts on bulk purchases.
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1 year ago
Which of the basic organizational functions records all financial activity from billing customers to paying employees?
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Which of the basic organizational functions records all financial activity from billing customers to paying employees: Accounting

Financial usually refers to money matters or transactions of some size or importance. Cash, stocks, bonds, mutual funds, and bank deposits are all examples of financial assets.

The Financial field includes three main subcategories:

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2 years ago
A customer comes into the store to return a gallon of milk. She says she bought it earlier today, but the due date on the gallon
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<em>You tell them it's too late to exchange since it already expired.</em>

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4 years ago
Your friend Wanda established her gourmet dog treat business, Salty Pawz, using personal funds, since she initially sold her pro
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Based on the advantages and disadvantages for each type of financing mentioned below, the best method for financing the expansion for Wanda's business is taking a loan (e.g. 1 year).

<u>Take a term loan (e.g. 1 year)</u>

A term loan is best described as an amount provided by the bank for a fixed amount and a agreed payment schedule with an interest rate either fixed or floating.

The main advantage of a bank loan is that it would not be repaid on demand instead it would be paid back as per schedule within a period of 1 to 10 years. Another advantage is that you would only have to pay the bank the interest rate and not the company's profit or share.

The disadvantage is that when loans are taken, then the amount (principal) and interest is to be repaid even if the loan is not being used. Another possible disadvantage is that a loan can be obtained if you have any asset (such as a house or car) to be kept as security. This is a guarantee in the likely event the bank's loan is not repaid on time.

<u>Look for investors to fund her business in exchange for ownership in the company</u>

This means finding individuals/institutions to provide financing as capital to be used in business for expansion.

Unlike a bank loan, here the investors accept the risk that if the business fails then their financing would be lost. Therefore, if the business ends up in losses then the amount is not required to be returned to their respective financiers. Another advantage is that you don't require any credit history to earn financing through investors.

The main disadvantage is that the sharing (profits) are divided between multiple investors based on their investment or as per their agreed sharing ratio. Moreover, the new investors might prefer to take more risks for a business to grow and which means that the stakes are always high.

In conclusion, Wanda is working on a small business and which is expanding at a slow rate with the risk being kept at a bare minimum. In which case taking a loan with amount and duration being set at a point where she would be able to return the loan acquired, is a better financing option for Wanda's business.

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3. In ICS, the members of the Command Staff assume the title of:
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