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sveticcg [70]
3 years ago
13

Suppose Congress is considering raising the top federal marginal tax rate from 35% to 40%. Senator Jones believes the elasticity

of taxable income is large. Senator Smith believes the elasticity of taxable income is small. (Both believe the elasticity is positive.) The Congressional Budget Office estimates the effects of the tax proposal using each Senator's assumptions. (i) Will the estimates of additional revenue from the tax increase be larger or smaller under Senator Jones's assumptions, compared to Senator Smith's assumptions? (ii) What about estimates of the efficiency costs of the tax increase: which set of assumptions leads to the higher estimate?
Business
1 answer:
KIM [24]3 years ago
3 0

Answer:

Explanation:

Solution-

According to Senator Jones, the elasticity of taxable income is larger, which means that due to a certain percentage rise in taxes, the taxable income rises by a greater percentage. Also, according to Senator Smith, the elasticity of taxable income is small, which means that due to a certain percentage rise in taxes, the taxable income rises by a smaller percentage.

(I) Under Senator Jones assumptions, due to rise in taxes, the taxable income has risen considerably as compared to Senator Smith assumptions. Thus the estimates of additional revenue from the tax increase will be larger under Senator Jones assumptions, compared to Smith's assumptions.

(ii) Since under Senator Jones assumptions, elasticity of taxable income is large. So due to rise in taxes, there is a significant proportional rise in taxable income under Jone's assumptions compared to Senator Smith assumptions. Thus the costs of the tax increase is borne more under Senator Jones assumptions , compared to Smith's assumptions.

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The duty of all businesses to provide a significant net positive contribution to the general good of customers, employees, the c
exis [7]

Answer:

Corporate Social Responsibility

Explanation:

The corporate social responsibility are set of guidelines for the company to operate ethically and bring value for the better future of people, animals, plants and marine life. These guidelines brings forward the concept of sustainability, which says that the companies and businesses must not compromise the needs of future generation by satisfying the needs of current generation. So this means corporate social responsibility is the duty of care to future and current generations.

8 0
3 years ago
Rankin Corp. common stock is priced at $74.20 per share. The company just paid its $1.10 quarterly dividend. Interest rates are
Luda [366]

Answer:

The answer is $0.12 gain

Explanation:

We will be obtaining the no-arbitrage premium of the corresponding put as dictated by put-call parity, as follows: V P (0, K = 70, T = 0.5) = V C (K = 70, T = 0.5) + e rt K S(0) + P V 0,T (Dividends)

= 6.50 + exponential (0.03 70 74.20) + e (0.06 0.25 1.10) + e (0.06 0.5 1.10)

= 67.70 + 0.97 70 + 0.98 1.10 + 0.97 1.10

= 67.70 + 68.97 + 1.08 = 2.38.

Since we have decided to short the call at a premium higher by $0.12, the answer is $0.12 gain.

Thank you.

7 0
3 years ago
Data related to the inventories of Costco Medical Supply are presented below:
Lerok [7]

Answer:

146

Explanation:

The computation is shown below

<u>Particulars       Surgical         Surgical     Rehab                Rehab    </u>

<u>                         Equipment    Supplies    Equipment        Supplies</u>

Cost (A)              151                    103            256                    153

Selling price       272                  135            342                    153

Less:

cost to sell            18                   10                 18                    7

Net realizable

value (B)                254             125                   324             146

<u>Lower of A & B     151                 103                256                146</u>

7 0
3 years ago
The following information is available from the land account: Opening balance $270,000 Sold for $200,000 cash 170,000 credit ent
oee [108]

Answer:

a. cash received from sale of land, $200,000.

Explanation:

A statement of cash flows can be described as a financial statement that provides the summary of the amount of cash and cash equivalents that a company receives or pays during a particular period.

A cash flow statement presents how cash and cash equivalents are affected by changes in income and balance sheet accounts by breaking the analysis down to operating, investing, and financing activities.

As it can be seen above, investing activities is one of the three categories of activities that are reported in a statement of cash flows. Investing activities under the statement of cash flows therefore deals with the payments or receipts of cash and cash equivalents for the purchase and sale of long-term assets and other business investments during a particular period.

From the question, the only cash and cash equivalents transaction is the selling of land for $200,000 cash. Therefore, items in the Investing Activities section of the statement of cash flows should include cash received from sale of land, $200,000. The correct option is therefore a. cash received from sale of land, $200,000.

4 0
3 years ago
The number-one cash crop in the united states was marijuana prior to 1890.
Ede4ka [16]

<span>A. </span>True. Based on the history of marijuana and other cannabis products, Marijuana was the number-one cash crop in the united states prior to 1890. Marijuana is a depressant and does not contain nicotine. It is a schedule I controlled substance, according to U.S. federal regulations where there is approximately 77% of illicit drug users smoke marijuana. The use of marijuana for medicinal purposes is illegal in the U.S but legal in Canada. The "reverse tolerance" turns out to be due to variations in the manner in which the drug is ingested is one of the long-term effect of Marijuana.





8 0
3 years ago
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