Answer:
When a taxpayer has an underpayment of estimated tax or fall behind on his/her tax prepayment, then he/she is required to pay a penalty on Form 2210. This penalty is called underpayment penalty.
According to the tax laws, Mr. P and Ms. S can avoid an underpayment penalty if their withholding's and estimated tax payments equal or exceed one of the following two safe harbors:
- 90 percent of current tax liability ($200,000 x 90% = $180,000)
- 110 percent of previous year tax liability (110% x $170,000 = $187,000)
From the above calculation, it is clear that Mr. P and Ms. S's withholding's ($175,000) do not equal or exceed the amount of two safe harbors. So, they need to increase their withholding's or make estimated payments to avoid underpayment penalty.
If Mr. P and Ms. S increase their withholding's by $5,000 or make estimated payments of $1,250
per quarter ($5000/4), they can avoid the underpayment penalty.
Mr. Paula and Simon average gross income is greater than $150,000, so 110% is taken.
It is and should be the managers job to do that
Answer:
operating exposure
Explanation:
Based on the scenario being described within the question it can be said that the term being mentioned is known as operating exposure and deals with the company's operations over various months or years and the changes incurred due to unexpected changes in the exchange rate. The exchange rate is the price at which one currency is traded for another. Drastic changes in these rates can cause assets value to decline drastically.
<u>Given:</u>
Elasticity of Demand = 2
Decrease in price = 1%
<u>To find:</u>
Change in quantity demanded
<u>Solution:</u>
The percentage change in quantity demanded is the mathematical product of the percentage change in price and elasticity of demand. This can be mathematically represented as,
Since, there is a decrease in price, the demand for the product will increase. Therefore, we can conclude that there will be 2% increase in quantity demanded
