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Drupady [299]
2 years ago
8

Jim left his previous job as a sales manager and started his own sales consulting business. He previously earned $70,000 per yea

r, but he now pays himself $25,000 per year while he is building the new business. What is the economic cost of the time he contributes to the new business?
Business
1 answer:
emmainna [20.7K]2 years ago
8 0

$45,000 per year is the economic cost of the time he contributes to the new business.

<h3><u>Explanation:</u></h3>

The difference between the accounting cost and the implicit cost refers to the economic cost. Implicit cost refers to the opportunity cost that the person incurs when he makes a choice. For example consider Geetha is spending something for watching a movie. The cost that she spends for the movie and the cost that can be forgone by her when she spends that for some other things will be included in the economic cost.

In the example given Jim  was earning d $70,000 per year and now he is paying himself  $25,000 per year for building a new business. Thus the economic cost will be $70,000 -$25,000 = $45,000 per year. Here the accounting cost is  $70,000  and the implicit cost is $25,000.

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Answer:

Sole Proprietorship

Explanation:

Sole proprietorship is a form of business in which all liabilities,risks&responsibilities(especially in financial aspect) are being borne by a single individual.The individual may not necessarily be the operational entity in the business as he/she in question can employ employees he/she so desires,but when it comes to structuring,legality&sensitive decisions affecting the business,it is borne solely by the individual.This form of business is devoid of partnership,which explains why the demise of the owner is likely to bring an end to the business.

6 0
3 years ago
Employees at a pharmaceutical company make large profits by buying shares of the firm when the trials of a drug begin but before
lesantik [10]

Answer:

The correct answer is letter "C": Strong form.

Explanation:

The Efficient Market Hypothesis (EMH) is the theory that beating the market is impossible because current stock prices reflect all the information investors need to trade the markets. Technical and fundamental analysis remain useless in trying to predict future price action.

The EMH could be classified as the <em>Weak, Strong, </em>and <em>Semi-Strong EMH</em>. The strong form of the EMH establishes that insider information and public information are already in the current stock price, then, there is no special data that could provide an advantage to an investor to take advantage of the market.

In such a case,<em> the strong form of the EMH is opposed to the idea given in the example since it is proposing insider information gives employees an advantage to make large profits before the information of trial drugs is spread among the public.</em>

4 0
3 years ago
Problems determining authority and responsibility, poor response time, and poor integration are disadvantages of: Group of answe
jek_recluse [69]

Problems determining authority and responsibility, poor response time, and poor integration are disadvantages of The Functional Organization.

The Functional Organization is a type of organizational system which operates according to the principle of specialization in role and function.

  • In project management, many types of organizations exist and are chosen.
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  • A functional manager has a group of employees working under their supervision and authority.
  • Problems determining authority and responsibility, poor response time, and poor integration are more than likely and entirely possible to arise in this organizational system.

Therefore, problems determining authority and responsibility, poor response time, and poor integration are disadvantages of The Functional Organization.

Learn more about The Functional Organization here: brainly.com/question/14826777

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3 0
2 years ago
Spartan Corporation, a U.S. corporation, reported $2 million of pretax income from its business operations in Spartania, which w
AVprozaik [17]

Answer:

A. = (15% X $2M) + (21% X $2M) = $720,000. Since there is no mechanism for mitigating double taxation, the branch profit will be taxed on the to tax rate of 15% and 21% which is $300,000 and $420,000.

B. The total tax for $2m branch profit if US corporations can remove foreign based profit from US taxation will be just the 15% x $2m = $300,000.

C.If they are allowed to take deductions for foreign income taxes, the total tax on the $2m branch profit will be (21% -15%) x $2m = $120,000.

Explanation:

D.1. If credit are allowed for foreign income tax paid, total tax will be ($2m - $300,000 been foreign tax paid) x 21% = $357,000

D.2.

If the charge foreign income taxes at 30% and US corporations can claim refundable credit for foreign income tax paid on foreign source income = ($2m - $300,000 been the foreign income tax paid) = $1 700,000 x 30% = $510,000

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slava [35]

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~

4 0
3 years ago
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