Benefits add how much value to employees' pay? 10-20% 20-30% 30-40% 50-60%

Quanti Co., a calendar year taxpayer, purchased small tools for $5,000 on December 21, 2016, representing the company's only pur

iris [78.8K]

Answer:

1 and a half months worth of depreciation

Explanation:

The advantage of starting to depreciate an asset purchased on December is that next year you will be able to depreciate it for a full year under MACRS. Generally, when you purchase an asset, you have to use the half year convention and your depreciation expense for the first year will be low compared to the second year. But if you start depreciating your asset in the current year, even if you purchased it on December and the depreciation expense is not that significant, the next year you will be able to depreciate it at the second year rate.

7 0

3 years ago

Miltmar Corporation will pay a year-end dividend of $4, and dividends thereafter are expected to grow at the constant rate of 4%

____ [38]

Answer:

A. Market Capitalization rate = 13%

B. Intrinsic Value = $46.22

Explanation:

A. Market Capitalization rate:

CAPM should be used to calculate market capitalization from the given data. Following is the formula for CAPM

$CAPM=r+(MxB)$

r = risk free rate

M = market portfolio return

B = beta

Solution:

$CAPM=0.04+(0.75x0.12)$

CAPM = 13%

B. Intrinsic Value of stock

Gordon Growth Model (GGM) should be used to calculate intrinsic value of stock based on the given data.

Following is the formula for GGM

$GGM=Dx(1+g)/(r-g)$

D = Current Dividend

g = Dividend Growth rate

r = market capitalization rate (CAPM calculated in part A)

Solution:

$DDM=4x(1+0.04)/(0.13-.04)$

DDM = $46.22

Note: All values are rounded off to two decimal points.

7 0

3 years ago

1.If Enviromax wants to maximize profit, what price would they charge?

Lunna [17]

Answer:

The question is incomplete. However, kindly find below the complete version of the question:

Question

Jack and Diane own Enviromax, a monopolistically competitive firm that recycles paper products. (1.)If Enviromax wants to maximize profit, what price would they charge? (2).What is their profit per unit if they are operating at the profit maximizing output?

Answer / Explanation

(1) First before we continue to answer this question, let us define what a monopoly is: This is a kind of market situation where the sole production or manufacturing of a product have been given to a single entity.

The graph attached below will give us a proper understanding and illustration of the answer.

Where: MR in the graph is defined as the additional revenue obtained when producers produce 1 more unit of good and the AR refers to the total revenue divided by the amount of output produced which is essentially the price of one unit of good.

MC refers to the additional cost incurred by producers when they produce 1 more unit of good and is upwards sloping due to increasing opportunity costs of production.

Noting that since the firm is a monopolistic type, the MR curve is lower than the AR curve because if the firm wants to sell an additional unit of output it will have to lower the successive price. This is unlike the case of a firm operating in a PC where it takes the price as given and hence has no ability to set prices. it should also be noted that profit maximizing for all firms (whether PC or non-PC) occurs at MC=MR. This is because if MC>MR this means the additional cost of producing this unit of good > additional revenue obtained from selling this unit of good and is hence not profit maximizing. If MC<MR, this implies that the firm should not stop at producing this unit of good because it will be forgoing the additional net revenue (profit) should it do so. Hence all firms will produce at the point where MC=MR.

(2) Now referring back to the graph, the profit-maximising point where MC intersects MR hence occurs at output Q. The firm will hence produce Q and hence price at P according to the AR (DD) curve.

In the graph below, since AR > AC at the profit maximizing level, this implies that per unit revenue > per unit costs and the firm makes a supernormal profit (defined as what excess profit above what is needed to keep firms in production which is normal profit) of the shaded area. If the firm was operating in a perfectly competitive market however, then the profit maximizing point would occur at AR =MC (since AR=MR in a PC market) and the firm would be producing at Qpc and Ppc