Answer:
PV(after-tax net return in 7th year) = 70.55 (Approx)
Explanation:
Given:
Number of year = 7
Pre-tax net returns (Fn) = $100
Growth rate = 4% = 0.04
Inflation = 3% = 0.03
Marginal tax rate = 30% = 0.3
Discount rate = 10% = 0.1
Computation:
Fn = Fo(1+g)ⁿ = 100(1.04)⁷
Fn = 131.6
Nominal net returns = 131.6(1.03)⁷
Nominal net returns = 161.85
After tax return = 161.85 (1 - 0.3)
After tax return = 113.30
After-tax, risk adjusted discount rate = 0.1(1-0.3) = 7%
PV(after-tax net return in 7th year) = 113.30
(1+0.07)⁻⁷
PV(after-tax net return in 7th year) = 70.55 (Approx)
Answer:
Amount paid in;
Bonuses to employees = $5,150
State tax = $5,150
Federal tax = $41,200
Explanation:
The bonus paid to employees, federal tax and state tax are all a percentage of the profit made by the company.
The amount of each of these elements may be computed by applying the applicable percentage on the profit made by the company before any of these deductions.
amounts paid in;
bonuses = 5% * $103,000
= $5,150
state tax = 5% * $103,000
= $5,150
and
federal tax = 40% * $103,000
= $41,200
Answer:
Differential cost of Alternative B over Alternative A=$61,600
Explanation:
Differential Cost:
It is the difference in costs if there are more than one alternatives and one alternative is chosen while rejecting the other alternatives.
In order to calculate the differential cost of Alternative B over Alternative A, including all of the relevant costs we first calculate the total cost of both alternatives and then tae the difference.
Total Of Alternative A=Material Cost+Processing Cost+Equipment Rental+occupancy costs.
Total Of Alternative A=$28000+$34000+$11000+$19500=$92,500
Total Of Alternative B=Material Cost+Processing Cost+Equipment Rental+occupancy costs.
Total Of Alternative B=$64000+$34000+$28500+$27600=$154,100
Differential cost of Alternative B over Alternative A=Total Of Alternative B-Total Of Alternative A
Differential cost of Alternative B over Alternative A=$154,100-$92,500
Differential cost of Alternative B over Alternative A=$61,600
Answer:
A monopolist that practices perfect price discrimination
- a. creates no deadweight loss.
Explanation:
Theoretically, if a monopolist is able to practice perfect price discrimination:
- marginal revenue curve = demand curve
- consumer surplus = 0
- every customer pays the highest amount that they are willing to pay
- production level = perfectly competitive level of output
Answer:
<em>The Accounting Cycle is as follows:</em>
<em>1. Transactions are analyzed and recorded in the journal.
</em>
<em>2. Transactions are posted to the ledger.</em>
<em>3. An unadjusted trial balance is prepared.
</em>
<em>4. Adjustment data are asssembled and analyzed.
</em>
<em>5. An optional end-of-period spreadsheet is prepared.
</em>
<em>6. Adjusting entries are journalized and posted to the ledger.
</em>
<em>7. An adjusted trial balance is prepared.
</em>
<em>8. Financial statements are prepared.
</em>
<em>9. Closing entries are journalized and posted to the ledger.
</em>
<em>10. A post-closing trial balance is prepared.
</em>
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