Answer:
$54,000 cost basis in ABC; $6,000 cost basis in DEF
Explanation:
The original cost basis is the price that was paid for the shares. This means that 1,000 shares at $60 each gives a cost basis of $60,000.
Now if the subsidiary DEF is worth 10% of ABC which has a cost basis of $60,000, then the share of DEF that customers will have will be 10% of $60,000.
(10÷100) x $60,000 = 0.1 x $60,000
= $6,000.
Now, if DEF is worth $6,000 (i.e 10%) of ABC, then ABC's worth will now be $60,000 - $6,000 = $54,000.
The original cost basis is that price that was paid for the shared initially. This means that it has no effect on the increase in value of the shares.
Cheers.
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<h3>Who is an auditor?</h3>
A professional who is involved in the scrutiny of the financial statements and records of an organization and the one who is responsible for verification of actual transactions with business records, is an auditor.
Hence, the significance of an auditor is aforementioned.
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Answer: e. To drive up market share
Explanation:
Differentiation strategies involve adding features to a good to make it stand out from the Competition. Since these features are usually beneficial, the value of the good goes up and the company selling them can charge more. This is the main way things are done in Monopolistic markets.
However, sometimes it is best to charge the same price the Competition is charging even though you have a better product. This way the company is able to capture Market Share because the consumers will believe they are getting a better value for their money. For instance, if a company was selling Toyotas at $2,000 and it's competitor was selling the same Toyota but with 2 extra tires for the same $2,000 who would you use? The Competitor most likely.
This is why a firm might want to keep prices in line with competitors.
Answer:
None of the above
Explanation:
Companies can shorten their cash cycles by turning over their inventory faster. The quicker a company sells its goods, the sooner it takes in cash from cash and credit card sales and begins its accounts receivable aging. Inventory turnover has no impact on the cash cycles of service companies with no inventory.
Solution :
In the first statement, the government institutes a legal minimum of 8 dollar is considered a price floor because it imposes the lower limit on market price. It is binding as the market price is lower at the price of 7 dollars.
In the second statement, it is a price floor as the statement speaks about minimum wage laws that are creating the unemployment. The minimum wages also imposes lower limit at market wage.
The third statement is a price ceiling as the upper limit on price has been imposed. This is not binding since the price is below ceiling price.