Answer:
Option B is correct.
Tom's outside basis be in Freedom,LLC=$26,100
Explanation:
Option B is correct.
Amount Paid by Tom for buying Bob's LLC interest=$23,000
Tom's Share of LLC debt= $3,100
Tom's outside basis be in Freedom,LLC= Amount Paid by Tom for buying Bob's LLC interest + Tom's Share of LLC debt
Tom's outside basis be in Freedom,LLC= $23,000+$3,100
Tom's outside basis be in Freedom,LLC=$26,100
Answer:
The WACC is 10.93%
Explanation:
The WACC or weighted average cost of capital is the cost to firm of its capital structure. The capital structure of the firm consists of debt, preferred stock and common stock. The WACC is calculated by taking the sum of the weighted average cost of each component of the capital structure.
WACC = wD * rD * (1-tax rate) + wP * rP + wE * rE
Where,
- w represents the weight of each component as a proportion of total assets
- r represents the cost of each component
- We take the after tax cost of debt. So, rD is multiplied by (1-tax rate)
WACC = 0.45 * 0.09 * (1-0.35) + 0.1 * 0.065 + 0.45 * 0.17
WACC = 0.109325 or 10.9325% rounded off to 10.93%
Answer:
False.
Explanation:
Elasticity of demand is a measure of the responsiveness of changes in demand to change in price.
The value of elasticity shows type of good. Negative elasticity indicates that a good is inferior, and people will buy it when their income is low. But once income rises they will buy more luxurious goods. That is not the case here as elasticity is positive.
When elasticity is positive the good is a normal good and increase in income will result in increase in amount demanded of the good.
In the scenario give a positive elasticity of 0.45 should result in higher consumption among higher income people than lower income people.
The importance of doing customer research is to have a drive for new product development. A research can be effective in pointing out consumer trends and fads, as well as opening a direct customer communication channel that feels prestigious for having its requests valued by a company. Through concrete data of potential customers and new customers, an organization has the ability to meet the actual demand of potential customers and make possible adjustments to the production process.