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sesenic [268]
2 years ago
14

Axle Corporation acquires​ 100% of Drexel​ Corporation's stock from​ Drexel's shareholders for​ $500,000 cash. Drexel Corporatio

n has assets with a​ $600,000 adjusted basis and an​ $800,000 FMV. The assets are subject to​ $200,000 in liabilities. Drexel Corporation shareholders purchased their stock eight years ago for​ $300,000. Axle​ Corporation's basis in the Drexel Corporation stock is:
Business
2 answers:
Tasya [4]2 years ago
7 0

Answer:

$500000

Explanation:

A stock basis is the purchase price of the stock after commissions and expenses. Axle​ Corporation's basis in the Drexel Corporation stock is $500000 because the basis of a stock is its cost.  Drexel Corporation assets and their liabilities in liabilities are not needed in the purchase of a stock. The basis of property shall be the cost of such property and not including the property taxes

kolbaska11 [484]2 years ago
5 0

Answer:

$500,000 Axle​ Corporation's basis in the Drexel Corporation stock.

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the nominal interest rate is 7 percent and the expected inflation rate is 4 percent. the real interest rate is
Hoochie [10]

Answer:

2.88%

Explanation:

According to the fisher equation :

(1 + Nominal interest ) = (1 + real interest) (1 + inflation rate)

(1.07) = (1.04) x (1 + real interest)

(1.07) / (1.04) = (1 + real interest)

1.028846

real interest rate = 2.88%

6 0
3 years ago
The production plant for Ace Manufacturing has been located in the same place for over 100 years. It has just completed its new
Reptile [31]

Answer:

True

Explanation:

A single use plan is basically a one time business transaction that is supposed to take place only once and should not be repeated in the future.  In this case, the production plant has been used for more than 100 years, but once it is sold, its history and the company should no longer have any type of relationship with it.

7 0
3 years ago
Suppose you examine the central bank’s balance sheet and observe that since the previous day, reserves had fallen by $100 millio
aksik [14]

Answer:

The Central Bank is trying to increase money supply.

Explanation:

When the Central Bank makes moves to increase reserves, it means that it is simply trying to mop up excess cash from the economy to fight inflation. Spiking inflation means that the power of a currency is gradually being eroded. The Central Bank cannot allow this to happen so it hits the "Reduce Money In Circulation" button. It does this by reviewing upwards, the money reserves which commercial banks must hold with the Central Bank.  

It can also increase the rate at which it lends to the Commercial Banks and Investment houses. Commercial Banks, in turn, transfer the additional cost of borrowing to businesses who will seek loans. This slows down the rate at which money is pumped into the economy.

In the question, however, we notice that the Central Bank has enervated its reserves. This means that it is pumping more money into the economy. This economic move may have been executed to prevent the economy from slipping into a recession or simply to stimulate the economy.

In the short run, increased money supply means, businesses have more access to funds from commercial banks. More funds mean, more investment. Increased investment spending means the businesses will need to expand operations, hire more staff, and the multiplier effect goes on and on.

Cheers!

6 0
2 years ago
The use of accelerated depreciation:____.a. discourages investment in plant and equipment. b. increases expenses and decreases c
Elena-2011 [213]

Answer:

c. initially decreases the firm's taxes

Explanation:

Accelerated depreciation provides for a higher rate of capital allowance on the assets that is New and Unused and brought in the business for use in manufacturing for the first time. This allowance then lowers for the other years. The purpose of this is to encourage  investment in plant and equipment as it initially decreases the firm's taxes.

8 0
3 years ago
Industrial Equipment Supply is a new business. During its first year of​ operations, credit sales were $ 45 comma 000and collect
Andrei [34K]

Answer:

$600

Explanation:

The written down amount is $725, which is bad debt and provision is not required for it.

The increase in allowance for bad debt is always Written Off by using the provision and at the year end the amount that must have been written off is $600 which is the increase in the provision. This means that the Allowance for Bad Debts is​ $600.

3 0
3 years ago
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