Answer:
a. Compute the after tax cost of debt.
after tax cost of debt = 11% x (1 - tax rate) = 11% x 0.8 = 8.8%
b. Compute the after tax cost of preferred stock.
after tax cost of preferred stock = cost of preferred stock (no taxes are deducted for paying preferred dividends since they are paid in capital)
cost of preferred stocks = $6.40 / ($60 - $6) = $6.40 / $54 = 11.85%
c. Based on the facts given above, is the treasurer correct?
the difference = 11.85% - 8.8% = 3.05%, so the treasurer was right
Answer:
The cost of goods sold for last year was $795,000
Explanation:
Last year, in Jasper Company, beginning and ending inventories of work in process and finished goods equaled zero. Therefore,
The cost of goods sold for last year = Total cost of units were produced = Direct materials + Direct labor + Manufacturing overhead
Jasper Company had Direct materials of $180,000, Direct labor of $505,000, Manufacturing overhead of $110,000
The cost of goods sold for last year = $180,000 + $505,000 + $110,000 = $795,000
Answer: D. The government can use a tax to increase the marginal private cost of producing dry cleaning to equal the marginal social cost.
Explanation:
The Marginal Private Cost(MPC) is the cost that a company incurs per producing an additional good while Marginal Social Cost(MSC) is the cost incurred by the society (third parties) due to an additional good being produced. This includes marginal private costs as well.
The government should tax firms in such a way that they will see that MPC equal their MSC because this would ensure that they feel the full weight of the effects that their production is placing on the society. This will encourage them to produce at an efficient level that would reduce costs as much as possible especially MSCs.
Answer:
a.political corruption
Explanation:
This a nepotism form of political corruption. It is naming a close relative over the common people. It is using his power for illegitimate private gain.
This "inspection" creates no value to the economy and neither protects the windows from breaking.
Tammy is creating a fee to pay for his nephew office.
The real motivation is to extract funds from the taxpersons to her own personal benefit. This is an act of corruption.
Answer:
invest in a new production plant right now.
Explanation:
The best long term solution for these constraints would be to invest in a new production plant right now. This would set the pharmaceutical company back for some time as it would be a big cost which would take them a long time to recover through profits. Regardless, it would completely solve their scaling problem and allow them to drastically increase their profits the more they grow. Which would also decrease the amount of time before they recover the cost of the new plant.