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Anton [14]
3 years ago
5

Assume that a company currently depreciates its fixed assets over 7 years. Which of the following would occur if a tax law chang

e forced the company to depreciate its fixed assets over 10 years instead?
A. The company's tax payment would increase
B. The company's cash position would increase
C. The company's net income would increase.
D. Statements a and b are correct
E. Statements b and c are correct.
Business
1 answer:
KATRIN_1 [288]3 years ago
6 0

Answer: E. Statements b and c are correct.

Explanation:

Should the company begin to depreciate over a 10 year period as opposed to 7, that would mean that the depreciation expense per year will reduce as it is now spread over a longer period. Because Depreciation reduces the Net Income and therefore reduces the taxes on the Net Income, reducing depreciation means that there is more Net Income. This will mean that the company can be taxed more.

Also, as just mentioned, spreading Depreciation over a longer period will reduce the depreciation expense. This would translate to a lower reduction in the Net Income so the Net Income will increase by this change.

For example, if a $70,000 asset was to be depreciated to $0 over 7 years, those payments would be $10,000 each using the Straight line method. This would reduce Net Income by $10,000 every year. If the period was changed to 10 years, the amount drops to $7,000 per year which would mean only $7,000 to remove from the Net Income meaning there'll be more Net Income and hence, more taxes.

If you need any clarification do react or comment.

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As part of his 401(k) retirement plan at work, Ken Lowery invests 6.0 percent of his salary each month in the Capital Investment
Gnesinka [82]

Answer:

The amount of the fee is $1689.60

Explanation:

The computation of the amount of the fee is shown below:

= Dollar value × fund charges a 12b-1 fee

= $211,200 × 0.8%

= $211,200 × 0.008

= $1689.60

Since the question has asked the fee amount so we consider the fee charges percentage, not the capital investment Lifecycle fund. Thus, we ignore the Capital Investments Lifecycle Fund as it is not relevant.

Hence, the amount of the fee is $1689.60

8 0
3 years ago
A retired athlete built a gym near his house that could be used for free by all the residents in the neighborhood. However, the
zhuklara [117]

Answer:

Tragedy of the commons.

Explanation:

The "Tragedy of the Commons" refers to the phenomenon where People overuse a common resource. It is a situation arise when individual user share resources with much other and demand increase in comparison to the supply of resources, which lead to depletion, destruction, or damage to resources due to overconsumption. It can be prevented by using certain measures like fixing ownership of resources, assigning basic rules and regulations for usage of resources, penalizing for damage, etc.

In the given case, a retired athlete built a gym and made it common and free for neighborhood residents, which lead to overuse of gym facility and that is a tragedy of common arise.

4 0
3 years ago
2. Alex, Becky, Cindy, Deanna and Elias form a general partnership, Glorious Jeans, to manufacture coffee-colored clothing. Alex
kari74 [83]

Answer:

Under the UPA ( uniform partnership act ) the partners share the profits of the business according to their contributions towards the business ( mostly financial contribution)

The UPA is used to address the issues of profit and loss sharing in a business partnership based on financial contribution towards the business and not based on service rendered to the business hence it won't work in this situation

Explanation:

Under the UPA ( uniform partnership act ) the partners share the profits of the business according to their contributions towards the business ( mostly financial contribution), the primary purpose of the uniform partnership act to to address certain in-formal or formal issue that was not addressed under the business agreement reached between the partners,

The reason why the UPA might not govern the sharing of the profits is because of the involvement of a partner who did not contribute towards the capital but contributes in terms of service. The UPA is used to address the issues of profit and loss sharing in a business partnership based on financial contribution towards the business and not based on service rendered to the business hence it won't work in this situation

4 0
3 years ago
A contribution approach income statement ______. reports both gross margin and net income is prepared primarily for external rep
kvasek [131]

Answer:

separates costs into fixed and variable component

can assist with management decision making

Explanation:

The contribution margin may be defined as when we deduct the expenses of the variable from sales. Where contribution margin shows the organization revenue is contributing to net income and fixed cost.

The statement of contribution margin income tells of the earnings at various stages of operations.

This report of income is not used for external reporting purposes but rather for internal decision making by the management.

Therefore according to the above description, the last two statements are correct.

6 0
2 years ago
Ignore vinny's agreement with oscar and assume that vinny and maria had an otherwise valid contract. could maria avoid her oblig
omeli [17]
The answer is no, the only condition in her acceptance was that it pass a smog inspection. In addition, The Smog inspection is a significant part of the State's efforts to improve the air to breathe. The Smog inspections are intended to recognize vehicles with extra emissions so they can be appropriately fixed. The vehicle cannot be registered if the vehicle fails to pass the Smog inspection. In general, in order to obtain a smog test certificate, the vehicle must be repaired. After failing, there will be a report from the inspection station attendant specifying desired maintenances.
4 0
3 years ago
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