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True [87]
3 years ago
12

Company J must choose between two alternate business expenditures. Expenditure 1 would require a $80,000 cash outlay and Expendi

ture 2 requires a $60,000 cash outlay.
a. Determine the marginal tax rate at which the after-tax cash flows from the two expenditures are equal assuming that Expenditure 1 is fully deductible and Expenditure 2 is nondeductible.
b. Determine the marginal tax rate at which the after-tax cash flows from the two expenditures are equal assuming that Expenditure 1 is 50% deductible and Expenditure 2 is nondeductible.
Business
1 answer:
Tanya [424]3 years ago
6 0

Answer:

A. 25%

B. 50%

C. 48000 after tax cash flow

Explanation:

a. lets assume marginal tax rate is X%

After tax cash flow of 80000 should equal to 60000$

$80000 - [$80000*X%] = 60000$

80000*X% = 80000-60000

80000*X% =20000

X = 20000/80000

= 25%

b.

$80000 - [$80000*50%*x%] = 60000$

40000*x%=20000

x%=50%

c.

$80000- [$80000*x] = 60000 - [60000*50%*x]

80000-60000 = [80000*x] - [30000*x]

20000 = 50000x

x=40%

check

80000-40% =48000 after tax cash flow

60000*50%

=60000- [60000*50%*40%]

=48000 after tax cash flow

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A firm has a debt-equity ratio of 57 percent, a total asset turnover of 1.12, and a profit margin of 4.9 percent. The total equi
svp [43]

Answer:

$44,083.72

Explanation:

Given:

Debt ratio = 57%

Asset turnover = 1.12

Profit margin = 4.9%

Total equity = $511,640

Find the total debt:

Debt = debt ratio × total equity

= 0.57 * 511640

Debt = $291,634.80

Find the total assets:

Total assets = Total debt + Total equity = $291,634.80 + $511,640

Total assets =  $803,274.80

Find total turnover:

Turnover = Total assets * Total asset turnover ratio

= $803,274.80 * 1.12

= $899,667.78

Now find the amout of net income:

Net Income = Turnover * Profit margin

Net Income = $899,667.78 * 4.9%

= $44,083.72

The amount of net income is $44,083.72

6 0
4 years ago
a lawnmower manufacturer has the following loss distribution for its annual products liability costs: loss probability 250,000 0
Bas_tet [7]

Answer: $12,000

Explanation:

The question makes no sense in one area. The loss probability for $0 cannot be 90% because the other two are collectively 20%. I shall therefore assume that the loss probability for $0 is 80% so that they add up to 100%.

Expected claim cost = ∑[loss probability * (Loss - Deductible)]

= 0.9 * 0 + [0.15 * (10,000 - 10,000)] + [0.05 * (250,000 - 10,000)]

= $12,000

6 0
3 years ago
Which estimating technique uses a statistical relationship to calculate cost or duration based on historical data and other proj
VashaNatasha [74]

Parametric estimation is a  techniques that uses a statistical relationship to calculate cost or duration based on historical data and other project parameters

Parametric estimation is a quantitative method (statisitical relationship) used to estimate the project cost, resources, and duration based on historical data and other project parameters.

Parametric estimation models are used when:

  1. There is precedent
  2. The model is a unit hence can be scaled up
  3. The parameters required are easily quantifiable

While the other options of this question is incorrect because:

b. grass roots estimating

Cost estimation done by the individuals who will be performing the task being estimated.

c. empirical estimating

Estimation method in which the data is obtained using empirical formulas. It is usually based on an amalgamation of historical data, assumptions, guesses, and personal experience.  

d. analogous estimating

Also called top-down estimating, this is a technique that involves comparing previous projects, personal experiences and cursory cross-referencing observed costs to estimate time resources required. This technique is most useful in the absence of quantifiable data.

You can learn more about project estimation at

brainly.com/question/24322317

#SPJ4

3 0
2 years ago
When a job order costing system is​ used, actual manufacturing overhead costs are debited to​ ________?
dangina [55]
<span>The term manufacturing overhead represents all factory-related costs that are incurred when a product is manufactured.  </span>When a job order costing system is​ used, actual manufacturing overhead costs are debited to <span>the Manufacturing Overhead account. It includes both direct materials and direct labor.
</span>
3 0
3 years ago
A project requires a $28,000 investment and is expected to generate end-of-period annual cash inflows as follows: Year 1 Year 2
anastassius [24]

Answer:

$2,668.67

Explanation:

Net present value is the present value of after-tax cash flows from an investment less the amount invested.

NPV can be calculated using a financial calculator

Cash flow in year 0 =  $-28,000

Cash flow in year 1 =  $12,000

Cash flow in year 2 =  $13,000

Cash flow in year 3 =  $12,000

I = 10%

NPV = $2,668.67

To find the NPV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.

3. Press compute

7 0
3 years ago
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