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Anestetic [448]
3 years ago
7

Jurisdiction B levies a flat 7 percent tax on the first $5 million of annual corporate income. Required: Jersey Inc. generated $

3.9 million income this year. Compute Jersey’s income tax and determine its average and marginal tax rate on total income. Leray Inc. generated $9.6 million income this year. Compute Leray’s income tax and determine Leray’s average and marginal tax rate on total income. What type of rate structure does Jurisdiction B use for its corporate income tax?
Business
1 answer:
Pie3 years ago
6 0

Answer:

a. Jersey Inc. generated $3.9 million income this year.

Income tax

= 3.9 million * 7%

= $273,000

The Average tax rate

= Tax/ Income

= 273,000/3.9 million

= 7%

<em>Marginal tax is the additional tax per dollar. As this is less than the $5 million threshold, it is 7%</em>

b. Leray Inc. generated $9.6 million income this year.

Income tax

= 5 million * 7%

= $350,000

The Average tax rate

= Tax/ Income

= 350,000/9.6 million

= 3.6%

Marginal tax is the additional tax per dollar. As this is more than the $5 million threshold, and they do not have to pay any more tax, the Marginal rate is 0%.

c. What type of rate structure does Jurisdiction B use for its corporate income tax?

<u>Regressive Rate structure</u>

In this regime, the average tax decreases as the income earned increases. Looking at Leray Inc, this appears to be the case so this is a Regressive Rate Structure.

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Vulcan, Inc., has 8.7 percent coupon bonds on the market that have 10 years left to maturity. The bonds make annual payments and
Lana71 [14]

Answer:

$880.72

Explanation:

Bond price will be calculated by following formula

Bond Price = C x [ ( 1 - ( 1 + r )^-n ) / r ] + [ F x ( 1 + r )^-n ]

Bond Price = $87 x [ ( 1 - ( 1 + 0.107 )^-10 ) / 0.107 ] + [ $1,000 x ( 1 + 0.107 )^-10 ]

Bond Price = $87 x [ ( 1 - ( 1.107 )^-10 ) / 0.107 ] + [ $1,000 x ( 1.107 )^-10 ]

Bond Price = $87 x [ ( 1 - ( 1.107 )^-10 ) / 0.107 ] + [ $1,000 x ( 1.107 )^-10 ]

Bond Price = $518.87 + $361.85

Bond Price = $880.72

6 0
3 years ago
Mr. Wiley owns a couple of houses. He lives in the better one. The other house he rents to the Jones family for $20,000 per year
BARSIC [14]

Answer:

20,000

Explanation:

Only rented house is counted as per gdp

4 0
3 years ago
As a stockholder in Bozo Oil Company, you receive its annual report. In the financial statements, the firm has reported assets o
fgiga [73]

Answer:

See below

Explanation:

a. Earnings per share

= After tax earnings / Number of common shares outstanding

= $3,000,000 / 761,000

= $3.9 per share

b. Assuming that a share of Bozo Oil's company has a market value of $40, then, the firm's price earning ratio would be:

= Common stock market value / Earnings per share

= $40 / $3.9

= 10.26

c. The book value of a share of Bozo Oil's common stock

Book value = (Assets - Liabilities) / Number of shares outstanding

= ($15,000,000 - $9,000,000) / 761,000

= $6,000,000 / 751,000

= $7.88

7 0
3 years ago
Which of the following would further an economic goal of efficiency?
max2010maxim [7]

Answer:

The correct answer is (C)

Explanation:

Economics is all about allocating limited resources to attain maximum utility. In that regard, efficiency can be achieved by giving contracts to companies with higher productivity. These companies are all about attaining maximum productivity by investing limited resource. More productivity will increase the utility, and that will improve economic efficiency. So it is critical to give projects and contracts to certain companies which can increase the overall productivity.

7 0
3 years ago
Harrold is the project manager for his organization and he has seven people on his project team. Who is responsible for executin
charle [14.2K]

Answer: D. Project team

Explanation:

The project team is responsible for executing the project plan and creating the project deliverables. They are also in charge of contributing to the success of the project by making sure that the project objectives are achieved.

Each team mate has a specific role that he or she is assigned and the team should execute the tasks assigned to them successfully.

8 0
3 years ago
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