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elena-14-01-66 [18.8K]
3 years ago
15

The laffer curve makes the point that cutting a very high marginal tax rate can __________ the tax base enough so that tax reven

ues actually __________.
Business
1 answer:
Ivenika [448]3 years ago
8 0
<span>The laffer curve makes the point that cutting a very high marginal tax rate can raise the tax base enough so that tax revenues actually rise. The Laffer Curve is a theory that was developed by Arthur Laffer. The theory explains the relationship between tax rates and how much tax revue the government creates. </span>
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The asymmetric information problem _____
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The correct answer is letter C
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Which of the following is prepared first? A. Balance sheet B. Income statement C. Statement of owner’s equity D. Trial balance
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The income statement is prepared first. The income statement i<span>s a financial statement that reports the company's financial performance (profit and loss) over a specific accounting period. It describes how the business incurs its revenues and expenses, and it is also referred as </span>profit and loss statement (P&L). With help of this report management knows if the business made money during the period reported.
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Banks sometimes quote interest rates in the form of "add-on interest." In this case, if a 1-year loan is quoted with a 20% inter
Bess [88]

Answer:

Calculate the true APR:

It is given that the compounding period is 12 as the payment is done monthly. The total loan amount is $1,000 with $100 monthly installments at an interest rate of 20%. Annuity is a stream of cash flows that continues for a given number of years. The interest rate is calculated by following method. Use the following formula to calculate the present value:

Present value of annuity = c[\frac{1}{r}-\frac{1}{r(1+r)^{t} }]  

Where,

c —) Monthly payment

r —> Interest rate

t —> Compounding period

Now,

1000 = 100[\frac{1}{r}-\frac{1}{r(1+r)^{12} }]

We cannot determine the exact value of interest of annuity. Using the trial and error method we can determine the interest rate. We can use the TVM (time value of money) keys in the financial calculator to calculate the value of 'r' as below:

Enter

N = 12

PV = -1000

PMT =100

FV = 0

Now press i and we should find that the monthly rate for this annuity(r) is 2.923% per month.

Effective interest rate is the annualized interest rate using compound interest. Multiply the monthly rate by 12 to obtain APR as below:

APR = Monthly rate x 12

Substitute the values in the formula:

APR = 2.923% x 12

APR = 35.076%

Hence, the APR is 35.076%.

Determine the effective annual rate (EAR):

It is the net annual return received. The monthly rate should be used to calculate the effective annual rate with the help of the formula below:

1+ effective annual rate = (1 + monthly rate)^{12}

1+ effective annual rate = (1 + monthly rate)^{12} -1

1+ effective annual rate = (1 + 0.2923)^{12} -1

Effective annual rate = 0.41302 or 41.302 %

Hence, the effective annual rate is 41.302%.

Finally we may conclude that the true rate would be 20%, if $1,000 was borrowed today and $1,200 was paid back one year from today. It should be noted that the true rate must be greater than 20% because the twelve annual payment of $100 should be made before the end of the year.

8 0
3 years ago
Which of the following is a problem with information silos? a. isolated decisions b. organized processes c. decreased expense d.
Alisiya [41]
A. Isolated decisions
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3 years ago
A formal written statement of management's plans for the future, expressed in financial terms, is a a.budget b.gross profit repo
Yanka [14]

Answer:

a.budget

Explanation:

The budget refers to the estimation of the revenues earned and expenses incurred so that the company could able to take the decisions according to that.

It also a formal and written statement that shows the management plans for the upcoming future i.e to be expressed in a numerical term or we can say in financial terms

Hence, the correct option is a. budget

3 0
3 years ago
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