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Pavlova-9 [17]
3 years ago
15

Ramirez Corporation is subject to income tax only in State A. Ramirez generated the following income and deductions. Federal tax

able income $500,000 State A income tax expense 45,000 Depreciation allowed for Federal tax purposes 300,000 Depreciation allowed for state tax purposes 250,000 ​ Federal taxable income is the starting point in computing A taxable income. State income taxes are not deductible for A tax purposes. Ramirez’s A taxable income is:
a.$495,000.
b.$500,000.
c.$545,000.
d.$595,000.
Business
1 answer:
Alborosie3 years ago
8 0

Answer:

a. $495,000

Explanation:

Data provided

Federal taxable income = $500,000

State A income tax expense = $45,000

Depreciation Modification = $300,000, $250,000

The computation of taxable income is shown below:-

Federal taxable income + State A income tax expense - Depreciation Modification

= $500,000 + $45,000 - ($300,000 - $250,000)

= $545,000 - $50,000

= $495,000

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Suppose that the spot price of the euro is currently $1.30. The 1-year futures price is $1.35. Is the interest rate higher in th
valkas [14]

Answer:

The interest rate is higher in the US.

Explanation:

The forward price is calculated using the following formula,

F= S ( 1+Rd / 1+Rf)^t

where,

  • F = Forward rate
  • S = Spot rate
  • Rd = Nominal interest rate in domestic market
  • Rf = Nominal interest rate in foreign market
  • t = time in years

We consider that the domestic market is the US and the domestic currency is the USD. Thus, it is a direct quote where 1 EUR = 1.3 USD

The forward price ER is more than the Sport ER only when the interest rate in domestic market is more than the interest rate in foreign market and as a result, the value of domestic currency against a foreign currency in the forward market depreciates.

We can see this by the following example,

Say Spot rate is $1.3 per 1 EUR and the interest rate in US is 10% while that in Euro zone is 5%. When we calculate the forward ER we will see that 1 EUR will buy us more USD in forward (more than 1.3 USD)

F= 1.3 * (1.1 / 1.05)^1   => $1.362 PER 1EUR

3 0
3 years ago
Problem 2-15 (Algorithmic) Life Insurance (LO 2.8) Sharon transfers to Russ a life insurance policy with a cash surrender value
skelet666 [1.2K]

Answer:

$38,440

Explanation:

Calculation to determine How much of the proceeds, if any, is taxable to Russ

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Less: Cash Surrender value ($24,800)

Less: Premium paid ($11,160)

Taxable Proceeds $38,440

Therefore the taxable Proceeds are $38,440.

6 0
2 years ago
Select the correct answer.
ivolga24 [154]

First, the quotation for each car model has to be obtained. The quotation must include the taxes including insurance.Then, a comparison is done taking into account the mileage and the maximum allotted budget for the other expenses which is $800.

7 0
3 years ago
The 10 million U.S. residents with the highest SES (and the best health care) outlive the 10 million with the lowest SES who liv
mamaluj [8]

The 10 million U.S. residents with the highest SES outlive the 10 million with the lowest SES who live in rundown areas by about  <u>30</u> years.

<h3>What is socioeconomic status (SES)?</h3>

Socioeconomic status can be defined as the status of people in a society or community as based on the followings:

  • Income
  • Occupation
  • Education

In the United State of America people who are educated and earn higher income including having the best health care tend to live longer compare to those who live in a very poor condition and has a  lowest SES.

Inconclusion 10 million U.S. residents with the highest SES outlive the 10 million with the lowest SES who live in rundown areas by about  <u>30</u> years.

Learn more about socioeconomic status here:brainly.com/question/3867614

7 0
2 years ago
The total book value of WTC’s equity is $13 million, and book value per share is $20. The stock has a market-to-book ratio of 1.
lisabon 2012 [21]

Answer:

5.38 %

Explanation:

WACC = Cost of Equity x Weight of Equity + Cost of Debt x Weight of Debt

where,

Cost of Equity = 9.00 % (given)

After tax Cost of Debt = 6% x (1 - 0.21) = 4.74 %

Market Value of Equity = 1/5 x $13 million = $2.6 million

Weight of Equity = $2.6 million / $11.6 million = 0.22

Weight of Debt = $9 million / $11.6 million = 0.76

therefore,

WACC =  9.00 % x 0.22 + 4.74 % x 0.76

           = 5.38 %

thus

the company’s WACC is 5.38 %

5 0
3 years ago
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