Taxes paid by employees to federal and state government. Collected or withheld from one’s paycheck.
Answer:
B) stiff fines are not the only way to collect past due corporate taxes
Explanation:
Collecting taxes is not an easy or inexpensive job. The IRS spends billions of dollars in order to collect taxes and the same applies to state taxing entities (at a smaller proportion).
So if state tax official can find a way to collect past due taxes then it should always be a good idea. Everyone loves a discount and corporations probably love discounts more. If the reduction or elimination of fines will make corporations pay their state taxes, then it's a great idea.
It's always better to collect $100 in taxes than to have $200 in past due taxes that aren't collected.
Answer: Debt-to-income (DTI) ratio
Explanation: The DTI ratio is one that considers the customer's debt relative to his disposable income (income available for spend after personal income tax deduction). The ratio varies from bank to bank. It is the number one thing a bank considers before granting a loan facility to a customer.
The fact that a customer is paying off all its due loan obligations in a timely manner without any default does not mean he is liable to obtain a loan facility if his DTI ratio is on the high side. If the DTI ratio is on the high side, it means the customer's debt is absorbing the substantial portion of the disposable income. To enable the customer get more facilities, <em>it is expected that the disposable income too should increase or better still if the customer can enhance / increase his earning capacities. </em>
Answer:
1. $146,666.67
2. $129,411.76
Explanation:
In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below
Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)
1. For computing the value of the firm, first we have to compute the Expected rate of return which is shown below:
= 5% + 0.5 × (10% - 5%)
= 5% + 0.5 × 5%
= 5% + 2.5%
= 7.5%
Now the value of firm would be
= Expected cash flows ÷ Expected rate of return
= $11,000 ÷ 7.5%
= $146,666.67
2. If beta is 0.7, then the expected rate of return and the value of firm would be
= 5% + 0.7 × (10% - 5%)
= 5% + 0.7 × 5%
= 5% + 3.5%
= 8.5%
Now the value of firm would be
= Expected cash flows ÷ Expected rate of return
= $11,000 ÷ 8.5%
= $129,411.76
Cognitive evaluation theory would question the use of money as a motivator because external motivational tools may lower intrinsic motivation because people will start working to get the reward, NOT because they are intrinsically motivated or challenged.
