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Anika [276]
3 years ago
10

This year, State A raised revenues by increasing its general sales tax rate from 5 percent to 6 percent. Because of the increase

, the volume of taxable sales declined from $800 million to $710 million. In contrast, State Z raised revenues from its 5 percent sales tax by expanding the tax base to include certain retail services. The volume of services subject to tax was $50 million. (Enter your answers in dollars not in millions of dollars.)
a. Compute the additional revenue raised by State A .

b. Compute the additional revenue raised by State Z.
Business
1 answer:
Zielflug [23.3K]3 years ago
7 0

Answer:

a. $2,600,000

b. $2,500,000

Explanation:

The computation is shown below:

a. The additional revenue raised by State A is

= Revenue after applying the tax rate - initial revenue after applying the tax rate

where,

Initial revenue after applying the tax rate = $800 million × 5% = $40 million

And, the Revenue increased after applying the tax rate is

=  $710 million × 6%

= $42.6 million

So, the additional revenue is

= $42.6 million - $40 million

= $2,600,000

b. The additional revenue raised by State Z is

= Sales tax rate × service volume

= 5% × $50 million

= $2,500,000

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g100num [7]

Answer:

Market price today   $955.1347

Explanation:

To know the current market price we will calculate the present value ofthe cuopon payment and the maturity at the yield to maturity rate of 8.73%

<u>Present value of the annuity</u>

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

Cupon Payment: 1,000 face value x 8% / 2 payment per year = 40

time = 9 years x 2 payment per year = 18

rate = 8.73% = 0.0873 = 0.0873/2 = 0.04365

40 \times \frac{1-(1+0.04365)^{-18} }{0.04365} = PV\\

PV $491.6747

<u></u>

<u>Present value of the maturity</u>

\frac{Maturity}{(1 + rate)^{time} } = PV  

Maturity = face value =   1,000.00

time   18.00

rate  0.04365

\frac{1000}{(1 + 0.04365)^{18} } = PV  

PV   463.46

<u>Now we add both together to get the present value of the bond</u>

PV c   $491.6747

PV m   $463.4599

Total   $955.1347

7 0
3 years ago
Steeplechase Building Specialties manufactures metal stud to accommodate commercial framing contractors in the United States. Th
forsale [732]

Answer:

Explanation:

The cost equation is shown below:

Y = Constant + Volume × Independent variable

where,

Y = operating costs

And, The other items values would remain the same

Now put these values to the above formula  

So, the value would equal to

= $170 + 2,300 units × $260

= $170 + $598,000

= $598,170

Hence, the cost equation is displayed above and the operating costs are $598,170

3 0
3 years ago
Scott invests money in fixing up his house, an endeavor that he expects will generate profits because he will be able to rent it
Aleks [24]

Answer:

Scott's investment is in his own property and not in a common enterprise

Explanation:

From the question, we are informed about Scott who invests money in fixing up his house, an endeavor that he expects will generate profits because he will be able to rent it out as a bed and breakfast run by his sister. In this case , it is not a security subject to federal regulation because Scott's investment is in his own property and not in a common enterprise. Securities regulation is a law in court like U S that protect transaction as well as other dealing involving security, when a company fully comply with the security regulation, litigation can be avoided by the business with private party as well as security commissioners

3 0
3 years ago
The rate of return earned on a U.S. Treasury bill is frequently used as a proxy for the:A. risk premium.B. deflated rate of retu
IceJOKER [234]

Answer:

The correct answer is letter "C": risk-free rate.

Explanation:

The United States government issues a variety of debt obligations to finance its operations. Those with the shortest maturity are called Treasury Bills or T-Bills. One of the unique features of T-Bills is that the government does not make regular interest payments to the holder. Instead, the securities are sold at a price below its face value resulting in a profit at the maturity date.  

T-Bills are seen as low-risk investments compared to other securities being <em>the closest to risk-free return</em> in the market.

5 0
3 years ago
Jude wants to receive $1,100 at the beginning of each of the next eight years. If his opportunity cost rate is 9 percent compoun
alukav5142 [94]

Answer:

$6,636.25

Explanation:

The amount which will be deposited by the Jude today in order to receive the $1,100 in the beginning of each of next eight years shall be determined through present value of annuity formula, which is given as follow:

Amount to be deposited today=R+R[(1-(1+i)^n-1)/i]

Where

R=amount to be received at start of year=$1,100

i=interest rate compounded annually=9%

n=number of years involved=8

Amount to be deposited today=1,100+1,100[(1-(1+9%)^7/9%]

                                                   =$6,636.25

3 0
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