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kirza4 [7]
3 years ago
15

Mr. and Mrs. Jones sold their principal residence for $750,000. They had lived in their residence for 20 years, and it had an ad

justed basis of $210,000. The Joneses have decided not to purchase a new home and will instead rent a condominium on the beach. What amount of gain must they recognize on this transaction?
a. $0b. $540,000c. $750,000d. $40,000
Business
1 answer:
IceJOKER [234]3 years ago
7 0

Answer:

D) $40,000

Explanation:

The Joneses qualify for a Section 121 exemption since they lived at their house for 20 years. They are exempted from paying capital gains taxes on the first $500,000 ($250,000 if single) in realized gains from selling their home.

Joneses taxable gain = $750,000 (sales price) - $210,000 (basis) - $500,000 (section 121) = $40,000

They will have to recognize only $40,000 in gains.

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Over time, the average consumer will be better off from reduced trade barriers by ________.
AVprozaik [17]

Answer:

a. greater variety and lower prices

Explanation:

Due to the comparative advantages, countries can produce the product that they have proficiency. For example, if there are 2 countries, A and B. A have a  skill of producing tasty wine, they can produce better quality of wine than B with the lower cost. When the trade barriers are reduced, the wine from A will be sold in B, the customer will have more choices of wine in the market and the price will relatively less different comparing to the price when the high barriers exist.

6 0
3 years ago
Which of the following is not a step in the strategic training and development process?a. determining strategic initiatives base
Ronch [10]

Answer:

a. determining strategic initiatives based on business strategy translating initiatives into concrete learning activities facilitating

Explanation:

  • The strategic training and the development is a similar to the strategy planning process and in general identification of the needs and evaluation of the alternative and incentives and the assigning the right audience and implementation
3 0
3 years ago
LaTanya Corporation is planning to issue bonds with a face value of $100,000 and a coupon rate of 8 percent. The bonds mature in
kkurt [141]

Answer:

Case A:$100,000

Case B:$111,164.76

Case C:$94,967.05

Explanation:

The issue price of the bond can be computed using the excel pv formula stated below:

=-pv(rate,nper,pmt,fv)

Case A:

Rate is the market interest rate of 8%

nper is the number of coupon interest payable by the bond which is 7

pmt is the annual coupon interest of $8,000 (8%*$100,000)

fv is the face value of $100,000

=-pv(8%,7,8000,100000)=$100,000

Case B:

Rate is the market interest rate of 6%

nper is the number of coupon interest payable by the bond which is 7

pmt is the annual coupon interest of $8,000 (8%*$100,000)

fv is the face value of $100,000

=-pv(6%,7,8000,100000)=$111,164.76  

Case C:

Rate is the market interest rate of 9%

nper is the number of coupon interest payable by the bond which is 7

pmt is the annual coupon interest of $8,000 (8%*$100,000)

fv is the face value of $100,000

=-pv(9%,7,8000,100000)=$94,967.05  

 

6 0
3 years ago
A speedboat is considered to be a normal good and a luxury good. therefore, we would expect the income elasticity of demand to b
Soloha48 [4]
<span>Speedboat is considered to be a luxury good. Income elasticity is considered to be positive with the level of income which means if the income level is higher then the demand for luxury goods will also be higher. In this case, as the income increases, the demand of speedboat will be increased. Hence, speedboat has a positive relation with income elasticity of demand.</span>
4 0
3 years ago
You are considering two independent projects with the same discount rate of 11 percent.
VikaD [51]

Answer:

Project B should be accepted.

Explanation:

Giving the following information:

Project A:

Io= -$284,700

Year 1= $75,900

Year 2= $106,400

Year 3= $159,800

Project B:

Io= -$115,000

Year 1= $50,000

Year 2= $50,0000

Year 3= $50,000

Discount rate= 11%

To calculate the convenience of each project, we need to calculate the Net Present Value (NPV). If the NPV is positive, the project increases the value of the company.

NPV= -Io + ∑[Cf/(1+i)^n]

Cf= cash flow

Project A:

NPV= -284,700 + 75,900/1.11 + 106,400/1.11^2 + 159,800/1.11^3

NPV= -13,120.61

Project B:

NPV= -$115,000 + 50,000/1.11 + 50,000/1.11^2 + 50,000/1.11^3

NPV= 7,185.74

Project B should be accepted.

4 0
3 years ago
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