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Nonamiya [84]
3 years ago
6

Carla Vista Corporation recently reported an EBITDA of $30.70 million and net income of $9.7 million. The company had $6.8 milli

on in interest expense, and it's average corporate tax rate was 35 percent. What was its depreciation and amortization expense? (Round answer to 2 decimal places and enter your answer in dollars, e.g. 9,700,000.25)
Business
1 answer:
Bess [88]3 years ago
4 0

Answer:

$8,976,923.08

Explanation:

The computation of the  depreciation and amortization expense is shown below:

= EBITDA - EBIT

where,

EBITDA $30,700,000        

Now the EBIT = EBT + Interest

where,

EBT = (Net income) ÷ (1 - tax rate)

       = ($9.7 million) ÷ (1 - 0.35)

       = $14,923,076.92

And, the interest is $6,800,000

So, EBIT = $14,923,076.92 + $6,800,000 = $21,723,076.92

So, the depreciation and amortization expense  is

= $30,700,000 - $21,723,076.92

= $8,976,923.08

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Esther and Elizabeth are equal partners in the EE Partnership. The partners formed the partnership seven years ago by contributi
Ber [7]

Answer: Esther does not recognize any gain or loss on the distribution and her remaining basis in EE is $15,000

Explanation:

Base on the scenario been described in the question, repayment of liabilities is treated as a cash distribution. Esther's share of the debt reduction is Since this amount is lower than her outside basis ($40,000) she does not recognize a gain or loss.reduces her outside basis by the $25,000, which leaves her $15,000 of outside basis in EE afterthe debt repayment.

8 0
3 years ago
Rent control is an example of a _____________________. it sets the price of rent __________________ the equilibrium price and re
Shtirlitz [24]

Rent control is an example of a "price ceiling", it sets the price of rent "below" the equilibrium price and results in a "shortage" of apartments.


Answer is "D".


Rent control is a type of value control that confines the sum a property proprietor can charge for leasing a home or other land. Rent control goes about as a price ceiling by keeping rents either from being charged over a specific level or from expanding at a rate higher than a predetermined percentage.


8 0
3 years ago
When Tesla first launched their electric vehicles in the United States, they deviated from the norm in the automobile industry a
Damm [24]

Answer:

The choice of Tesla is known as Forward Integration.

According to the principles of Transaction Cost Economics, this is a good decision.

Explanation:

Companies sometimes take over the operations/businesses that deal with the distribution and supply of their products and or services. This move is known as forward integration.

Traditionally, companies focus on production then bring in middle-men such as Franchise owners, wholesales, dealers, and retailers to distribute their merhandise to the end user. Whilst there are associated benefits with this model, it's been found that the interests of the middle men also generate considerable costs.

In order to competitive advantage, companies are modifying their business models such that end users can deal directly with them thus reducing the final price of their goods and or services making them more accessible and easier to purchase for the consumers.

Transaction Cost Economics refers to the various ways in which an organisation can be set up in order to manage or control the costs associated with its transactions. The goal of transaction cost economics is to reduce overall costs in order to optimize profits, stay competitive and maintain growth by managing and modifying organisational structures and business models.

The most optimized organisational structure/business model is that which is able to attain the highest efficiency possible by operating at the lowest cost possible.

Good or Bad Decision

The market for motor vehicles is an oligopoly.

Therefore, price is an important factor to consider. As a more recent entrant into that space, this is very crucial for Tesla.

Tesla is not only entering into a market dominated by giants, but is also tryin to modify the way people know to drive cars (at least in most parts of the world). Therefore, it is a great move that it is going with a Price Penetration Strategy. Thus by cutting off the Franchise-Oriented dealerships and selling directly, Tesla is able to retain control over the price of it's vehicles.

The whole essence of reducing it's costs is so that it is able to make its products available to the consumers as an alternative to fossile fuel powered vehicles at the lowest cost possible. Despite it's best efforts, there are still petrol powered cars that are at least $10,000 cheaper that what Tesla is offering.

Besides price, one major factor that influences the choice to go with hybrid or 100% of electric cars is that they are clean and very environmental friendly.

Cheers!

5 0
3 years ago
If a life insurance company sells a $240,000 life insurance policy with a one year term to a 25-year old lady for $210, the prob
MrMuchimi

Answer: $112.08

Explanation:

Given that,

Life insurance policy = $240,000

Cost = $210

Amount to be paid by company to old lady if she survives (A):

= $240,000 - $210

= $239,790

Probability that she survives (P1) = 0.999592

Probability that she doesn't survives (P2) = 1 - 0.999592

                                                                     =  0.000408

Expected value of this policy for the insurance company:

= (P1 × cost of policy) - (P2 × A)

= 0.999592 × $210 -  0.000408 × $239,790

= $209.91432 - $97.83432

= $112.08

7 0
2 years ago
One objective of trade-oriented promotions is to encourage retailers to display and promote an established brand.
marusya05 [52]

False because the objective of <span>Trade Promotions can offer several benefits to businesses. Moreover, companies use Trade Promotions to improve distribution of their product at retailers and strengthen relationships with retailers. Most importantly trade Promotions can be advantage to introduce new product dispatch into retail stores </span>

8 0
3 years ago
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