Answer:
Zero- there is a $10 Million exemption equivalent ( d )
Explanation:
Annual exemption to be ignored = $15000
$1 million to an irrevocable trust
taxable gifts = $6 million
A) The amount of gift tax Nathan must remit in 2017 ignoring annual exemption
The gift tax must remit in 2017 is zero because there is a $10 million exemption because of the annual exception ( even if the annual exception is ignored ) and the lifetime benefits on taxable gifts that Nathan has is approximately $11.4 million, hence he wont be remitting any amount on gift tax in 2017
Answer:
Balance = $1,650
Explanation:
As Norma company has paid 4 months rent in advance, therefore at the end of June, norma company will record its 1-month expense as follows
Adjusting entry at the end of June would be
DEBIT CREDIT
Entry
Rent Expense $550
Prepaid Rent $550
The balance on Norma's prepaid expense would be
Prepaid Rent = $2200
Rent Expense = ($550)
Balance = $1,650
Answer: C. AA-rated short-term bonds
Explanation:
It was stated that the client has a low risk tolerance. Therefore, to reduce the credit risk, investment grade bonds are appropriate (BBB or higher). To reduce the interest rate risk, short-term maturities will be preferable to long-term maturities. Both of these factors will result in a safer bond investment.
Answer: Input Prices have increased.
Explanation:
When an Economy sees prices rising but at the same time productivity is falling, the likely cause of that is an increase in Input prices.
Input Prices are the prices of the raw materials and other goods needed to produce finished goods. If these prices should rise, it becomes more expensive for producers to produce and they will therefore reduce the amount of goods they produce. This reduction in Quantity leads to an increase win prices because according to the Law of Supply and Demand, if supply reduces and demand remains the same then prices must increase till a new equilibrium is reached.
For example, imagine a hypothetical Economy of Steel Makers. If the price of Iron changed from $5 to $10, producers who were producing 20 units of Steel will see their costs double and react by producing only 10 units of Steel to maintain cost margins thereby dropping Productivity.
The 20 units of Steel used to be sold in the market at $20 but now that the supply has dropped to 10 units, the price doubles to $40 to cater for this reduction in Quantity.
Question:
When performing capital budgeting, __________ incurred by a project are irrelevant to future investment decisions.
A) Opportunity costs
B) Depreciation
C) Sunk costs
D) Taxes
Answer:
The correct answer is C) Sunk Costs
Explanation:
Capital Budgeting is the art (most applicable to corporate persons) of planning expenditure that will be incurred in the future, especially on long term assets.
The reason you cannot factor Sunk Cost into a Capital Budget is because of its very nature.
Sunk Costs refer to monies for items that have already been expended and can never be recovered. If it can never be recovered and has <u>already</u> been incurred, it has no role to play in future considerations especially when the purpose of Capital Budgetting is considered.
The primary purpose of a Capital Budget is that it helps to further evaluate the inflow against the outflow of an investment to check whether or not the return is acceptable.
Every other option given in the question above are items that have futuristic qualities.
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