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konstantin123 [22]
3 years ago
6

A U.S. automobile company sells many of its cars in countries that have lower taxes on corporate profits than the U.S. Why might

it be profitable for the automobile company to vertically integrate into the car-retailing business in such countries, rather than contracting with independent car dealers?
Business
1 answer:
stira [4]3 years ago
4 0

Answer:

It will be more profitable to vertically integrate because the company will be able to further reduce its costs.

Explanation:

Profit = Sales - Cost

The lower the cost, the higher the profit (if sales remains the same).

A Vertical integration strategy requires a company to <u>own or control its suppliers (backward integration) or its distributors or retailers (forward integration)</u>, and therefore, gain more control over its value chain.

<em>If the U.S. automobile company chooses to vertically integrate into the car retailing business in countries where it sells most of its cars, then it would cut out certain costs, such as the cost of contracting with independent car dealers, which would further improve profitability.</em>

Also, such forward integration into retailing means the company will develop processes along its value chain that will increase the efficiency of its operations.

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At January 1, 2017, Benny Enterprises reported a balance in the Equipment account of $45,000. During the year the company purcha
zhannawk [14.2K]

Answer:

$4,000

Explanation:

The operating activities records daily activities of a business entity transactions such as depreciation expense, loss or profit on sale of long term assets, change in working capital etc.

With regards to the above scenario, there is a loss of $4,000 on the sale of equipment whilst same was recorded under the operating activity section as positive.

It is to be noted that the sale and equipment of an equipment falls under investing activity section hence shod be recorded therein as such, reason it was not considered here.

6 0
3 years ago
Timmy Company's comparative balance sheet at January 31, 2017, and 2016. reports the following (in millions):
Irina-Kira [14]

Answer:

The Accounting Equation states that;

Assets = Liabilities + Equity

Equity as at 2016 = Assets - Liabilities

= 50 - 13

= $37 million

Equity as at 2017 = Assets - Liabilities

= 77 - 18

= $59 million

1. Timmy issued $13 million of stock and declared no dividends.

<em>The Net Income ( loss) will be the figure that gives the Statement of Equity a figure of $59 million.</em>

Net Income = Total stockholders' equity, January 31, 2017 - Total stockholders' equity, January 31, 2016  - Issuance of stock

= 59 - 37 - 13

= $9 million

Total stockholders' equity, January 31, 2016  ................ 37

Add: Issuance of stock ......................................................... 13

Net income  ......................................................................9

Less: Dividends declared......................................................0

Net loss.......................................................................................0

Total stockholders' equity, January 31, 2017...................59

2. Timmy issued no stock but declared dividends of $17 million.

Net Income (loss) = Total stockholders' equity, January 31, 2017 - Total stockholders' equity, January 31, 2016  + Dividends Declared

= 59 - 37 + 17

= $39 million

Total stockholders' equity, January 31, 2016  ................ 37

Add: Issuance of stock ......................................................... 0

Net income  ......................................................................39

Less: Dividends declared......................................................(17)

Net loss.......................................................................................0

Total stockholders' equity, January 31, 2017...................59

3. Timmy issued $20 million of stock and declared dividends of $27 million.

Net Income (loss) = Total stockholders' equity, January 31, 2017 - Total stockholders' equity, January 31, 2016  + Dividends Declared -  Issuance of stock

= 59 - 37 + 27 - 20

= $29 million

Total stockholders' equity, January 31, 2016  ................ 37

Add: Issuance of stock ......................................................... 20

Net income  ......................................................................29

Less: Dividends declared......................................................(27)

Net loss.......................................................................................0

Total stockholders' equity, January 31, 2017...................59

7 0
3 years ago
Fly-By-Night Insurance Company had much larger losses than forecast. The company did not charge adequate premiums nor did the co
Reika [66]

Answer: (A) Guaranty fund

Explanation:

 According to the given question, the Guaranty fund is one of the type of fund that basically helps in paying the various types of unpaid claims.

This type of funds are basically covering the beneficiaries of the insurance organization in which the insurer are basically helps in selling the various types of products and the services in the market.

 The guaranty funds is typically used by the administrator for the purpose of protecting the policyholder in the insurance firm.

Therefore, Option (A) is correct answer.    

7 0
3 years ago
A consulting engineer has been engaged to advise a town how best to proceed with the construction of a 200,000 water supply rese
kozerog [31]

Answer:

<u>Single stage construction</u>

PW of Cost = $22,400,000 + 100,000(P/A, 4%, 25)

PW of Cost = $22,400,000 + 100,000(15.622)

PW of Cost = $22,400,000 + $1,562,200

PW of Cost = $23,962,200

<u>Tow stage construction</u>

PW of cots = $14,200,000 + $75,000(P/A, 4%, 25) + $12,600,000(P/F, 4%, 25)

PW of cost = $14,200,000 + $75,000(15.622) + $12,600,000(0.3751)

PW of cost = $14,200,000 + $1,171,650 + $4,726,260

PW of cost = $20,097,910

Conclusion: We should choose two stage construction as it has lesser Present worth of cost.

6 0
3 years ago
Which resource management activity identifies and verifies that personnel?
Sliva [168]

Resource management effectively develops and uses the resources of the organization. Credentialing recognizes and confirms the personnel.

<h3>What is credentialing?</h3>

Credentialing is a process that involves the documentation of the individual of the organization or the corporation so that the true and fair authentication and qualification of the person associated are ensured.

It is an essential function of the management that confirms the skills and requirements of the person that will be an asset to the organization. The qualifications of the person required will be established and can be approved.

Therefore, credentialing is used to determine and affirm.

Learn more about credentialing here:

brainly.com/question/12670472

#SPJ4

8 0
2 years ago
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