The type of business that Wally is proposing in the scenario above is partnership. There are three different type of partnership,they are: limited partnership, limited liability partnership and general partnership. Each of these three types provides partners with different level of liability. Thus, Wally was wrong when he said that there could be no personal liability for debts.
Answer:
The net impact on the income will be 2,795,000 each year
Explanation:
The purchase will generate the followng:
4.3 depreciation expense
and a tax shield, as this expense decrease the net income:
depreciation x tax-rate = tax-shield
4.3 x 35% = 1.505 millions
total impact on net income:
depreciation expense - tax shield
4.3 - 1.505 = 2.795 millions net impact
The amount of the stock price that will be reflected in the PVGO is $10
The value of an organization's potential future growth is symbolized by the acronym PVGO, or "present value of growth opportunities." It represents the potential value for the organization by reinvesting its earnings back into the business.
Expected Dividend payment (D) = $2.50
Total Earnings (E) = $4
Rate of return (ROR) = 20%
Step 1. Using no growth rate (GR), computing the stock price (SP)
Since the growth rate is not specified, 0% is taken as the default value.
The stock price (SP) = E/ROR
= $4 / 20%
Stock price = $20.
Step 2. Computing the SP reflected in PVGO.
So, total SP with no GR
= $30 - $20
Stock price with no growth rate = $10
Hence, the $10 will be reflected in the PVGO
Learn more about PVGO:
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The last one would most likely be it
Answer:
b. Reducing the minimum wage and the time and cost to open a business would shift the long-run aggregate supply curve to the right
Explanation:
Minimum wage is a wage set by the government, to pay for laborers. Wages below this is illegal. Wages are also a major cost to any firm. When they have been reduced, cost of production is likely to fall. Cost of production is a factor affecting supply. When cost of production falls, supply shifts right.
This is explained as that when cost of production falls, businesses can now make higher profits. This acts as a motivation for many other firms to also enter into the market. Therefore, supply is likely to rise in the long-run, shifting the supply curve to the right.
Time and cost to open a business is another factor affecting supply. When the time and cost is high, it discourages new firms because they do not want to undergo the hassle of submitting many legal documents or may not have enough funds to pay for all the costs. However, when the cost and time taken falls, more firms will be willing and able to enter into the market. Thus, the supply curve shifts right in the long run, increasing quantity supplied.
