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zlopas [31]
3 years ago
14

The LeMond Corporation just purchased a new production line. Assume that the firm planned to depreciate the equipment over 5 yea

rs on a straight-line basis, but Congress then passed a provision that requires the company to depreciate the equipment on a straight-line basis over 7 years. Other things held constant, which of the following will occur as a result of this Congressional action? Assume that the company uses the same depreciation method for tax and stockholder reporting purposes.a. LeMond's tax liability for the year will be lower.b. LeMond's taxable income will be lower.c. LeMond's net fixed assets as shown on the balance sheet will be higher at the end of the year.d. LeMond's cash position will improve (increase).e. LeMond's reported net income after taxes for the year will be lower.
Business
1 answer:
hammer [34]3 years ago
8 0

Answer:

c. LeMond's net fixed assets as shown on the balance sheet will be higher at the end of the year.

Explanation:

Provided information,

There is a purchase of new production line. On which the company plans to charge depreciation as per straight line method for 5 years. As per the recent amendment the company has to charge depreciation fr 7 years under straight line method.

Thus, depreciation per year will be decreased.

As depreciation is an expense which is going to decrease with increase in duration, therefore, income will increase and accordingly taxes will increase.

Also the net balance of fixed assets will be higher, as depreciation is less.

Therefore, correct statement is

c. LeMond's net fixed assets as shown on the balance sheet will be higher at the end of the year.

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3 years ago
59. A poultry rancher discovered that when she increased the price of organic eggs from $0.75 to $1.00 per dozen, the sales of h
oee [108]

Answer:

PED = -1.4 or |1.4| in absolute values, price elastic

Explanation:

the price elasticity of demand (PED) using the midpoint method:

PED = % change in quantity / % change in price

  • % change in quantity = {(Q 2 − Q1 ) / [(Q2 + Q1)/2]} x 100 = {(200 − 300 ) / [(200 + 300)/2]} x 100 =  -100 / 250 = -0.4
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PED = -0.4 / 0.286 = -1.4 or |1.4| in absolute values

5 0
3 years ago
Suppose that the populations of the United States and China both increase by 12 million people in one year. What would be the re
JulijaS [17]

Answer:

In the given year, American population grew by 4% while China's population grew by 1.2%.

Explanation:

The present problem establishes that in one year the populations of China and the United States both increased by 12 million people. But both countries have different populations: China has a population of 1 billion inhabitants, while the United States has 300 million.

To determine the percentage of population increase in each country, we must perform cross multiplications:

-U.S:

300 = 100

12 = X

(12 x 100) / 300 = X

1,200 / 300 = X

4 = X

The United States grew by population 4% in the year.

-China:

1,000 = 100

12 = X

(12 x 100) / 1,000 = X

1,200 / 1,000 = X

1.2 = X

China grew by population 1.2% in the same period of time.

8 0
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Answer:

The answer is true.

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This is mainly because there is no way to differentiate the product to change the price. Since all goods are identical, one good is a perfect substitute for another.

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