Presto will record the acquisition cost of the equipment as $22,250 (21,500+430+320) which is the total cost for making the fixed asset ready for operation. The Generally accepted accounting principle requires a company to record all of the acquisition cost of a fixed asset. Thus, Presto company must capitalize all cost related to the fixed asset.
Answer: Option (c) is correct.
Explanation:
Correct Option: The corporate tax rate increases.
If there is an increase in the corporate tax rate then this will induce the firms to increase the amount of their debt. This is due to the fact that the firms with more debt are going to pay less tax because of the large interest expense. Due to large interest expenses, their income before tax reduces.
Hence, large corporate taxes encourage firms to increase the amount of debt. Therefore, the firms with no debt pays higher taxes than the firms with higher amount of debt.
105 km/hr is the same as 65.244 miles per hour. You can do this by doing unit conversions until you get the satisfied units. Then you multiply and reduce the fraction. In this case, the answer is 65.244 miles per hour.
