Answer:
Keep-or-drop decision
Explanation:
Keep-or-drop decision is taken when a manager is in a dilemma whether to continue a product line or segment or shut it down. The manager needs to analyse income statement related to the product line to understand the major issue with product line. If costs are more than revenue, then the product line needs to be shut down. If the reasons for incurring losses can be addressed and that revenue from the product line is more, then it is not dropped.
Therefore, manager takes a keep-or-drop decision.
I do believe that gifts to a spouse are exempt from any gift tax. So $0 is taxable.
Rick has received a rebate. A rebate is a sum paid by a method for diminishment, return, or discount on what has just been paid or contributed. It is a sort of offers advancement that advertisers utilize basically as motivating forces or supplements to item deals. There is confusion on discount and rebate, the rebate is a backend discount while the discount is the upfront meaning you the customer is discounted by the time he/she bought the item.
Answer:
Net income= $33 million
Explanation:
A leveraged buyout is a buyout of an entity by it's own managers/board members mostly through debt financing. Now the expected sales after the buyout is 500 million, we are asked to calculate net income only in the first year. First of all lets see what net income is. Net income is the remaining amount of income after having paid all the expenses which is mostly the residual income available for either distribution to shareholders or transfer to retained earnings.
The formula for net income is as follows:
Net income/profit= Sales revenue - COGS - Administrative expenses- depreciation and amortization - Interest expense - Tax
Let first calculate COGS & other administrative expense, depreciation and interest expenses first.
COGS & ADMIN: 500*0.6=300 m
Depreciation: 500*0.05 =25m
Interest expense for the year: 1500 * 0.08= 120m
Now lets substitute values in the formula mentioned above:
Income before taxes: 500m - 300m - 25m - 120m
Income before taxes: 55m
Income after taxes; 55m - 22m (taxes= 55*40%)
Net income= $33 million
