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3 years ago

Should the United States increase their top tax rate by taxing individuals 90% on all income they earn ABOVE $500,000

Business

1 answer:

snow_lady [41]3 years ago

3 0

Answer:

Individuals who earn ~$500,000 and above 40% of all income taxes, and pay 59.1% of all taxes shared. In a common sense, the amount paid should be proportional to not only the amount they earn, but also the amount of people within that tax bracket. In essence, the United States should not increase the top tax rate to 90%, as it is an extremely unfair tax to individuals, just because they are "richer". Also, a hike in taxes to the rich would negatively affect everybody else as well. Many rich people own successful businesses that employ hundreds, if not thousands of middle class and lower class workers. An increase in taxes can lead to lower pays, stagnant job growth or even shrinking, as well as higher costs of products and services to help make up for the amount loss to taxes. The United States government do not need the extra funds if they themselves push for agendas that are not beneficial to the ordinary American, and therefore, they do not have the justification to raise the tax rate.

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CDF Inc. is contemplating the acquisition of Pogo Company. The values of the two companies as separate entities are $20 million

S_A_V [24]

Answer: See explanation

Explanation:

a. What is the gain from merger?

This will be calculated by dividing the cost savings by the opportunity cost of capital. This will be:

= $500,000 / 10%

= $500,000 / 0.1

= $5,000,000

= $5 million

b. What is the cost of the cash offer?

This will be the difference between the cash cash paid and the value of the firm acquired which will be:

= $14 million - $10 million

= $4 million

c. What is the cost of the sock alternative?

First, we calculate the value of the merged company which will be:

= $20 million + $10 million + $5 million

= $35 million

Then, cost of stock alternative will be:

= (35 million x 55%) – $10 million

= ($35 million × 0.55) - $10 million

= $19.25 million - $10 million

= $9.25 million

d. What is the NPV of the acquisition under the cash offer?

This will be:

= $5 million - $4 million

= $1 million

e. What is the NPV under the stock offer?

This will be:

= $5 million - $9.25 million

= -$4.25 million

7 0

3 years ago

Sally’s Dress Shop, Inc. reports operating income of $200,000 and interest expense of $18,000. The average common stockholders’

Sphinxa [80]

Answer:

Explanation:

Given that,

Beginning assets = $80,000

Ending asset = $120,000

Operating income = $200,000

Interest expense = $18,000

Average common stockholders’ equity = $20,000

Average total assets:

= (Beginning assets + ending asset) ÷ 2

= ($80,000 + $120,000) ÷ 2

= $100,000

Leverage ratio:

= Average total assets ÷ Average common stockholders' equity

= $100,000 ÷ $20,000

= 5

7 0

4 years ago

What is self interest and how is it manifest in business?

balandron [24]

self-interest. Focus on actions or activities that are advantageous to an individual or organization. For a business or individual to survive and grow, a degree of self-interest is necessary.

7 0

3 years ago

Read 2 more answers

What is consumer behaviour?

xz_007 [3.2K]

Answer:

Consumer behaviour is the study of individuals, groups, or organizations and all the activities associated with the purchase, use and disposal of goods and services, and how the consumer's emotions, attitudes and preferences affect buying behaviour

7 0

3 years ago

Which of the following is not a cost created by high inflation? A. Inflationary impacts are not distributed evenly across the

dybincka [34]

Answer:

The correct answer is the option A: inflationary impacts are not distributed evenly across the population, therefore, inflation causes the economy to redistribute income across households.

Explanation:

To begin with, inflation is the name that receives, in an economic field, the term that refers to the situation where the economy of a country decreases its purchasing power per unit of money causing a loss of real value in the unit of exchange. Moreover, it affects the economy in many negative ways, such as the reductions of the real value of the wages, causing a more difficult situation for the people to buy the primary groceries. Furthemore, it also increases the opportunity cost of holding money, causing to discourage investment and savings.

Therefore, that it is understandable that the correct answer is the option A, due to the fact that a high inflation do not cause a redistribution in the income of the economy to the households, actually it causes the whole oppositve impact.

7 0

3 years ago