Most operating decisions of management focus on a narrow range of activity called the_____________

In a firm's income statement, interest payments on debt are deducted Blank______ corporate taxes are calculated, which Blank____

seropon [69]

In a firm's income statement, interest payments on debt are deducted before corporate taxes are calculated, which reduces the firm's tax liability.

<h3>Income statement: What is it?</h3>

An overview of the company's operations for a specific time period is provided in the income statement. The revenue (gross and net sales), cost of products sold, operational expenditures (selling and general and administrative expenses), taxes, and net profit or loss are the statement's primary components.

<h3>What is displayed on a firm's income statement?</h3>

The statement logically and coherently presents the company's revenue, costs, gross profit, selling and administrative expenses, other expenses and income, taxes paid, and net profit.

learn more about firm's income statement here brainly.com/question/14733237

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6 0

2 years ago

Jeremy and Alyssa Johnson have been married for five years and do not have any children. Jeremy was married previously and has o

patriot [66]

Solution:

Gross income : 262000

a) Ordinary and necessary business expenses

amount explanation

108850 Ordinary expenses associated with Jeremyâs

business (42250+47700+18900)

b) Unreimbursed employment expenses

amount explanation

- Un reimbursed employee business expenses

are deductible from AGI not for AGI

c) Real property taxes and investment expenses.

amount explanation

- Taxes and investment expenses

are deductible from AGI not for AGI

d) Rental expenses

amount explanation

8590 Rental expenses are deductible for

AGI even though they aretechnically investment or

production of income expenses.

e) Self-employed health insurance

amount explanation

4590 Jeremy may deduct all the costs of his

health insurance because he is not eligible

for health plan

f) Self- employment taxes

amount explanation

1295 Â½ of self-employment taxes allowed

as for AGI deduction

g) Alimony

amount explanation

5180 Alimony is allowed for AGI deductions

h) Donations

amount explanation

- Charitable contributions are from

not for AGI deductions

Total for AGI deductions Amount

128505

AGI 135495

8 0

3 years ago

A telephone customer service center wants to ensure that the majority of its customers’ calls are answered within a reasonable a

mr_godi [17]

Answer:

The Capability Index for this process is 1.04. The right answer is B

Explanation:

According to the given data we have the following:

μ = 31 Seconds

USL = 45

LSL = 10

Standard deviation σ= 4.5

Therefore, in order to calculate the Capability Index for this process we would have to use the following formula:

Cpk=Min( USL-μ , μ- LSL)

3×σ 3×σ

Cpk=Min( 45-31 , 31- 10)

3×4.5 3×4.5

Cpk = Min ( 1.04,1.56) = 1.04

The Capability Index for this process is 1.04

7 0

3 years ago

If Wild Widgets, Inc., were an all-equity company, it would have a beta of 0.9. The company has a target debt-equity ratio of .4

Veronika [31]

Answer:

a. 6.5%

b. 13.06%

c. 10.91%

Explanation:

a.

Cost of debt of a bond is yield to maturity. Yield to maturity is the rate of return that a investor actually receives or a borrows actually pays on a bond. It is long term return or payment which is expressed in annual term.

Formula for yield to maturity is as follow

Yield to maturity = [ C + ( F - P ) / n ] / [ (F + P ) / 2 ]

By placing values in the formula

Assuming the bond face value is $1,000

Yield to maturity = [ (1000x7.2) + ( 1,000 - $1,090 ) / 20 ] / [ ( 1,000 + $1,090 ) / 2 ]

Yield to maturity = [ $72 + ( 1,000 - $1,090 ) / 20 ] / $1,045

Yield to maturity = [ $72 - $4.5 ] / $1,045

Yield to maturity = $67.5 / $1,045

Yield to maturity = 6.5%

So, the cost of Debt is 6.5%

b.

As 0.9 is the unlevered beta, We need Levered beta due to restructuring of capital.

Beta Levered = Beta Unlevered x ( 1 + ( 1 - tax rate ) x Debt / Equity)

Beta Levered = 0.9 x ( 1 + ( 1 - 0.35 ) x 0.4 )

Beta Levered = 1.134

Cost of equity can be calculated using CAPM

CAPM calculated the expected return on an equity investment based on the risk free rate, market premium and risk beta of the investment.

Formula for CAPM is as follow

Expected return = Risk free Rate + Beta ( Market premium)

As we know the Risk premium is the difference of market return and risk free rate.

Expected return = Risk free Rate + Beta ( Market Return - Risk free Rate )

Ra = Rf + β ( Rm - Rf )

Ra = 4.1% + 1.134 ( 12% - 4.1% )

Ra = 13.06%

Cost of Equity is 13.06%

c.

WACC is the average cost of capital of the firm based on the weightage of the debt and weightage of the equity multiplied to their respective costs.

According to WACC formula

WACC = ( Cost of equity x Weightage of equity )+ ( Cost of debt ( 1- t) x Weightage of debt )

Placing the values in formula

If the debt to equity 0.4 the equity value should be 1 and total capital is 1.4 ( 1 + 0.4 )

WACC = ( 13.06% x 1 / 1.4 )+ ( 6.5% ( 1- 0.35) x 0.4 / 1.4 ) = 9.71% + 1.2% = 10.91%

WACC is 10.91%

4 0

3 years ago

Let’s suppose you would like to buy a home for $250,000. But like most U.S. citizens, you don’t have enough cash on hand to pay

noname [10]

Answer:

1. Calculate the monthly payment for a 30-year mortgage loan.

we can do this by using the present value of an annuity formula

the loan's interest rate is missing, so I looked for a similar question and found that it is 6%

present value = monthly payment x annuity factor

monthly payment = present value / annuity factor

present value = $200,000 (loan's principal)
PV annuity factor, 0.5%, 360 periods = 166.79161

monthly payment = $200,000 / 166.79161 = $1,199.101082 ≈ $1,199.10

2. Calculate the amount of interest that you’d pay for a 30-year mortgage loan.

total interests paid during the 30 years = (monthly payment x 360) - principal = ($1,199.10 x 360) - $200,000 = $231,676

8 0

3 years ago

Most operating decisions of management focus on a narrow range of activity called the______________.