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2 years ago

Formal tax definition

Business

2 answers:

Olin [163]2 years ago

7 0

Answer:

Formal tax legislation is the process by which a proposed tax rule or tax change may become law in the United States. Formal tax legislation follows specific steps as defined by the U.S. Constitution.

Explanation:

https://www.investopedia.com/terms/f/formaltaxlegislation.asp

const2013 [10]2 years ago

4 0

Answer:

Explanation:

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Problem 14-13 Calculating the WACC [LO3] Dinklage Corp. has 4 million shares of common stock outstanding. The current share pric

sleet_krkn [62]

Answer:

WACC = 8.97%

Explanation:

total value of equity = $70 x 4,000,000 = $280,000,000

cost of equity:

$70 = $4.4935 / (Re - 4.5%)

Re - 4.5% = 6.42%

Re = 10.92%

total value of debt:

$75 million x 0.95 = $71,250,000

YTM = {70 + [(1,000 - 950)/25]} / [(1,000 + 950)/2] = 72 / 975 = 7.3846%

$60 million x 1.07 = $64,200,000

YTM = {60 + [(1,000 - 1,070)/8]} / [(1,000 + 1,070)/2] = 51.25 / 1,035 = 4.9517%

weighted cost of debt = ($71,250,000 / $135,450,000 x 7.3846%) + ($64,200,000 / $135,450,000 x 4.9517%) = 3.8845% + 2.347% = 6.2315%

total value of the firm = $280,000,000 + $135,450,000 = $415,450,000

equity weight = $280,000,000 / $415,450,000 = 0.674

debt weight = 1 - 0.674 = 0.326

WACC = (0.674 x 10.92%) + (0.326 x 6.2315% x 0.79) = 7.36% + 1.605% = 8.965% = 8.97%

8 0

3 years ago

Jax Recording Studio purchased $7,800 in electronic components from Music World. Jax signed a 60-day, 8% promissory note for $7,

Lostsunrise [7]

Answer:

Interest revenue = $7800*8%/360*60

Interest revenue = $104

Date Journal Entry Debit Credit

Cash $7,904

Notes Receivable $7,800

Interest Revenue $104

5 0

2 years ago

Carla Vista Co. issued $590,000, 10-year, 7% bonds at 101. Prepare the journal entry to record the sale of these bonds on Januar

34kurt

Answer:

cash 595,900 debit

bonds payable 590,000 credit

premium on bonds 5,900 credit

Explanation:

We have to record the issuance of the bonds:

cash proceeds:

face value x quote:

590,000 x 101/100 = 595,900

face value (590,000)

premium 5,900

There is a premium as we are receiving more than we are going to pay at maturity.

We will debit the cash proceeds form the bond

and credit the bonds and premium

6 0

3 years ago

An investment has the following cash flows and a required return of 13 percent. Based on IRR, should this project be accepted? W

Ganezh [65]

Answer:

B. No; The IRR is less than the required return by about 1.53 percent

Explanation:

The internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested.

The IRR can be calculated using a financial calculator:

Cash flow in year zero = -$42,000

Cash flow in year one = 15,300

Cash flow in year two = 28,400

Cash flow in year three = 7,500

IRR = 11.47%

A project should be chosen if the IRR is greater than the required return

The IRR is less than the required return so the project should be rejected.

To find the IRR using a financial calacutor:

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 IRR button and then press the compute button.

I hope my answer helps you

6 0

3 years ago

How do price ceilings and price floors restrict the free exchange of prices?

Yuki888 [10]

Price ceilings are the limit of the prices to go high above the given ceiling while the price floor limit the prices to go below the given amount. The two restrict the free exchange of prices by putting a range of prices allowable only for a certain product. The prices are already limited between the price floor and the price ceiling.

8 0

3 years ago

Formal tax definition​

Formal tax definition