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gayaneshka [121]
3 years ago
11

By shutting​ down, a firm A. stops receiving revenue and is stuck with its fixed costs. B. can avoid paying taxes on its previou

sly earned profits. C. stops receiving revenue but continues to pay variable costs. D. avoids its sunk costs as well as its variable costs. g
Business
1 answer:
wel3 years ago
4 0

Answer:

option A

Explanation: A firm cannot avoid paying taxes on previous profits as these profits were earned before the shutting down period and generally the taxes on profits for current period  are paid at a later period. Thus option B is incorrect.

.

Revenue is the total income that a business gets from its normal operations and variable cost is the cost that changes with the level of output. Thus, there will be no revenue and also variable cost.  Hence option C is incorrect.

.

Sunk cost are the costs that cannot be recovered and are already been incurred.So a company can avoid its variable cost by shutting down but not its   sunk cost. Hence option D is incorrect.

.

Fixed costs are the costs that are independent of the level of output. Therefore, a company after shutting down will not receive revenue but will have to bear fixed cost. Hence option A is correct.

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Vanessa bought a house for $268,500. She has a 30 year mortgage with a fixed rate of 6.25%. Vanessaâs monthly payments are $1,59
Musya8 [376]

Answer:

Ans. A) $9,314.45

Explanation:

Hi, first we have to bring to present value the monthly payments to be made for 30 years (360 months). In order for this to be useful, we have to convert this annua compounded monthly rate (6.25%) to an effective rate, that is 6.25% / 12 = 0.5208%. Now, when we find this present value, we are going to substract it from the price of the house and that is the value of the down payment. But let´s just go ahead and do it together.

We have to use this formula to bring to present value the $1,595.85 monthly payments, for 30 years (360 months) at a rate of 6.25% (0.5208% monthly).

PresentValue=\frac{A((1+r)^{n}-1) }{r(1+r)^{n} }

It should look like this

PresentValue=\frac{1,595.85((1+ 0.005208 )^{360}-1) }{0.005208(1+0.005208)^{360} }

Present Value=259,185.55

Now, let´s go ahead and find the down payment.

DownPayment=Price-PresentValue

DownPayment=268,500-259,185.55= 9,314.45

So, the answer is a). $9,314.45

Best of luck.

5 0
3 years ago
Ellie has been working for an engineering firm and earning an annual salary of $80,000. she decides to open her own engineering
goldenfox [79]
Ellie would have annual expenses of $15000+$3000+$1000+$1200+$35000=$55,200. If she cashed in her $20.000 deposit then her balance owing would be $35,200 so she would have to make at least this much or preferably the $55,200 to break even., 
7 0
3 years ago
A $2,000 cash dividend is planned in 2019. No dividend was paid in 2018. 1,000 shares of 5% cumulative $10 par value preferred s
Irina-Kira [14]

Answer:

C) $1000

Explanation:

First lets calculate the cumulative preferred stock dividend for 2 years

(1000 * 10 ) * 5% = 500 / year

so for 2 years = $1000 since it is cumulative and not paid in one year is added to next year.

Total dividend payable = $2000

so for common stock whatever is left over is paid thus,

Common stock share = Total - Preferred cumulative = 2000 - 1000 = $1000

Hope that helps.

4 0
3 years ago
Which of these statements best represents the law of supply?
Dafna1 [17]

Answer:

The correct answer would be option C, When the price of a good decreases, sellers produce less of the good.

Explanation:

According to the law of supply, when the price of the product increases, the quantity supplied also increases.

This theory suggests that there is a direct relationship between the price of the product and the quantity supplied of the product. So when the price of a good decreases, sellers produce less of the good.

6 0
3 years ago
Croft Corporation has a target capital structure of 70 percent common stock and 30 percent debt. Its cost of equity is 16 percen
Bezzdna [24]

Answer:

13.02%

Explanation:

Debt = 30% and Common stock = 70%

Cost of equity is 16% and debt is 8%

Tax is 24%

WACC = Cost of equity*Weight of equity + After tax cost of debt*Weight of debt

WACC = (0.16*0.70) + (0.08*(1-0.24)*0.30)

WACC = 0.112 + 0.01824

WACC = 0.13024

WACC = 13.02%

So, the the company's WACC is 13.02%

5 0
3 years ago
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