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sasho [114]
3 years ago
6

A 5-year corporate bond yields 10.70%. A 5-year municipal bond of equal risk yields 6.50%. Assume that the state tax rate is zer

o. At what federal tax rate are you indifferent between the two bonds? (Round your final answer to two decimal places.)
Business
1 answer:
Ksenya-84 [330]3 years ago
4 0

Answer:

The multiple choices are as follows:

a.

25.40%

b.

29.03%

c.

39.25%

d.

33.98%

e.

27.38%

The correct option is C,39.25% federal tax rate

Explanation:

In determining the federal tax that one would be indifferent in choosing between the two bonds, we equate the yield of the two bonds as follows with tax element being deducted from corporate bond yield:

6.50%=10.70%*(1-t)

The t is the tax rate which is the unknown

divide both sides by 10.70%

6.50%/10.70%=1-t

0.607476636 =1-t

t=1-0.607476636

t=0.392523364 =39.25%

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Answer:

Find a bondholder or purchaser.

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In order to being able to financiate the construction of a new manufacturing facility for my company, I would have to find a bondholder (or some ofthem) that would lend me all the money, with its pertinent clauses.

I would have to fill those clauses, perhaps its money returning timeline, some finantial records, etc.

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Answer:

a. nearshore outsourcing

Explanation:

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Since Canada and Mexico are neighboring countries of the US, this is nearshore outsourcing. On the other hand, offshore outsourcing is a type of outsourcing that transfers the activities on to farther countries. In this example, offshore countries would be India or Ukraine.

5 0
3 years ago
What style of leadership is grounded in the exchange relationship between the leader and the follower
Annette [7]

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For transactional Leadership, promotion of compliance is done through both rewards and punishment.

7 0
3 years ago
The following data relate to direct materials costs for November: Actual costs 4,700 pounds at $5.40 Standard costs 4,500 pounds
Vera_Pavlovna [14]

$2,820 favorable

Calculation to determine direct materials quantity variance

Using this formula:

Direct materials price variance = (Actual materials cost per lb. - Standard materials cost per lb.) × Actual quantity lb

Direct materials price variance = ($5.40 - $6.00) × 4,700 lbs.

Direct materials price variance = (-$0.60) × 4,700 lbs.

Direct materials price variance = $2,820 favorable

Therefore the direct materials price variance is $2,820 favorable.

Direct material costs:

are the costs of raw materials or parts that go directly into producing products. For example, if Company A is a toy manufacturer, an example of a direct material cost would be the plastic used to make the toys.

Why is direct materials important?

Direct materials is an important concept in throughput analysis, where throughput is the revenue generated by a product sale, less all totally variable costs. In most situations, the only totally variable costs associated with a product are its direct materials.

What do you mean by actual cost?

In accounting, Actual Cost refers to the amount of money that was paid to acquire a product or asset. This could be the historical, past, or present-day cost of the product

What do you mean by standard cost?

A standard cost is the budgeted cost of a regular manufacturing process against which actual costs are compared. Of course, if a new product, service, or process is to be carried out, the initial standard costs will have to be estimated.

Learn more about direct costs:

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6 0
1 year ago
According to classical macroeconomic theory, changes in the money supply affect:a. variables measured in terms of money and vari
sweet [91]

Answer: The correct answer is " b. variables measured in terms of money but not variables measured in terms of quantities or relative price".

Explanation: According to classical macroeconomic theory, changes in the money supply affect variables measured in terms of money but not variables measured in terms of quantities or relative price.

6 0
3 years ago
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