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tino4ka555 [31]
3 years ago
14

Canyon Buff Corp. is considering the purchase of a new piece of equipment which would cost $11,000. This equipment will have a f

ive-year useful life and have a salvage value of $1,000 at the end of the five-year period. The marginal tax rate is 30% and the average tax rate is 20%. Assume a straight-line depreciation, the net effect of annual depreciation on the free cash flow is $_____ in each of the 5 years.
Business
1 answer:
Furkat [3]3 years ago
5 0

Answer:

Tax shield on depreciation = 600

Explanation:

given data

new piece of equipment = $11,000

salvage value = $1,000

marginal tax rate = 30%

average tax rate = 20%

time period = 5 year

to find out

net effect of annual depreciation on the free cash flow

solution

we know here cost of asset and  Salvage value so we get depreciation cost  

depreciation cost is = 11000 - 1000 = 10000  

and

annual depreciation = 2000  

so that Tax shield on depreciation will be

Tax shield on depreciation = 2000 × 30%

Tax shield on depreciation = 600

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The following legal claims exist for Huprey Co. Identify the accounting treatment for each claim as either (a) a liability that
Deffense [45]

Answer:

Huprey Co.

Identifying the accounting treatment for each claim as either (a) a liability that is recorded or (b) an item described in notes to its financial statements:

1. Huprey (defendant) estimates that a pending lawsuit could result in damages of $1,550,000; it is unlikely that the plaintiff will win the case.a. A liability that is recorded.

b. An item described in notes to its financial statements.

2. Huprey faces a loss on a pending lawsuit that it is unlikely to lose; the amount is reasonably estimable.

a. An item described in notes to its financial statements. b. A liability that is recorded.

3. Huprey faces a probable loss on a pending lawsuit; the amount is reasonably estimable.a. An item described in notes to its financial statements.

b. A liability that is recorded.

Explanation:

Huprey Co. will recognize and record contingent liabilities in its accounts when it can be reasonably established that the future event will occur and the amount of the liability can be reasonably estimated. The implication is that Huprey Co. must establish two things before a contingent liability is recognized and recorded.  One is that the probability or the likelihood or the chance that the event will happen exists and can be estimated.  With the probability estimate, it becomes possible for Huprey Co. to also estimate the amount that the happening of the event will cost it.

4 0
3 years ago
Leonardo, who is married but files separately, earns $90,000 of taxable income. He also has $8,750 in city of Tulsa bonds. His w
UkoKoshka [18]

Answer: 17.56%

Explanation:

Given that,

Leonardo taxable income = $90,000

Tulsa bonds = $8,750

Theresa taxable income = $50,000

Computation of Leonardo's Tax:

According to the tax rate schedule,

Total Tax = Tax + 24% of taxable income over $82,500

                = $14,089.50 + 24% × $7,500

                = $14,089.50 + $1,800

                = $15,889.5

Computation of Theresa's Tax:

According to the tax rate schedule,

Total Tax = Tax + 22% of taxable income over $38,700

                = $4453.50 + 22% × $11,300

                = $4453.50 + $2,486

                = $6939.5

Total tax on Leonardo's income and Theresa's income:

= $15,889.5 + $6939.5

= $22,829

Effective tax rate = \frac{Total\ Tax}{Total\ Taxable\ Income}\times100

                              = \frac{22,829}{130,000}\times100

                              = 17.56%

5 0
4 years ago
Blue Apron delivers to your front door all the ingredients and instructions for preparing full meals for two or four people for
Vanyuwa [196]

Answer:

Place Mix

Explanation:

Blue Apron delivers to your front door all the ingredients and instructions for preparing full meals for two or four people for several occasions weekly. Delivery to your home would constitute place mix element of the marketing mix for Blue Apron.

Basically , Market mix have<em> four </em>elements they are -

1. <u>Product Mix </u>- It refers to all the decisions which are related to the product.

2.<u> Price Mix</u> - It refers to all the decisions which are related to the price of the product.

3.<u> Promotion Mix</u> - It refers to all the decisions which are related to the promotion or sale of the product.

4. <u>Place Mix</u> - It refers to all the decisions which are related to make the product deliver to the customer.

When the product is not deliver at the right time and at the right place to the customer ,then all other activities of the marketing mix will be of no use . <em>Place Mix is an important element of the Marketing Mix.</em>

Place Mix have two elements which have in distribution of the product they are -

   1. <u>Channels of distributions</u> - It includes the people and the firm .

   2. <u>Physical distributions</u> - It includes the transportation or warehouse.

   

8 0
3 years ago
A registered representative wishes to give a speech to a group of 35 potential retail clients at a restaurant. The speech is scr
maksim [4K]

Answer:

Prior principal approval must be obtained and a copy of the speech must be retained in your firm's Office of Supervisory Jurisdiction

Explanation:

Because the speech is to be givento 35 attendees, it is under the Retail Communication. Every speech should be honest and of good taste; and the speech must be informational, but far from promotional.

It is not required that the speech content has to be pre-filed with the SEC. A copy must be kept a period of f 3 years for inspection by FINRA examiners. The speech script would be kept on file in the firm's supervisory compliance office that is the Office of Supervisory Jurisdiction.

3 0
3 years ago
The BCG has given specific names and descriptions to the four resulting quadrants in its growth-share matrix based on the amount
S_A_V [24]

Answer:

low market growth, high relative market share

Explanation:

In 1970, Bruce D. Henderson created a certain growth-share matrix for the Boston Consulting group in which the cash cow was stated to be a company that operates in a slow-growing industry but with large market share.

Companies are known to love cash cows, reason being that they require minimal amount of money to maintain while the business on its own gives back much more money than one puts into it

3 0
4 years ago
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