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Amiraneli [1.4K]
3 years ago
8

Assume personal tax rates are lower than corporate tax rates. From a tax-paying shareholder point of view, how should a firm spe

nd its excess cash once it has funded all positive net present value projects
Business
1 answer:
ASHA 777 [7]3 years ago
4 0

Answer: e. repurchase shares

Explanation:

If the personal tax rates are lower than corporate tax rates then the company should engage in an activity that would put money into the pockets of shareholders such that they would take advantage of the lower personal tax rates.

The best way to do that would be a share repurchase. The company would probably buy at above market rates which would give shareholders capital gain and they wouldn't have to pay much taxes on it as personal rates are lower.

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A company enters into a short futures contract to sell 5000 bushels of wheat for 571'4 cents per bushel. The initial margin is $
zalisa [80]

Answer:

563.4 cents

Explanation:

A margin call occurs when the margin of an investment falls bellow the maintenance margin.

In this problem, the production costs for 5,000 bushels are given by:

Margin = Price*units -Cost\\\$1,500=\$5.714*5000 - Cost\\Cost = \$27,070

The price per bushel that yields a margin of $1,100 is:

\$1,100=Price*5,000- \$27,070\\Price =\$5.634=563.4\ cents

You will receive a margin call at a price of 563.4 cents per bushel.

4 0
4 years ago
There are different standards for due process in civil and criminal cases. True or False
kobusy [5.1K]

That statement is false

Due process refers to the treatment that both parties involved in a case should experience in order to obtain a hearing. The standard for the treatment is the same for civil and criminal cases. The only thing that different between the two only the magnitude of the punishment.

7 0
3 years ago
A building acquired at the beginning of the year at a cost of $123,800 has an estimated residual value of $4,800 and an estimate
grigory [225]

Answer:

A. $119,000

B. 10%

C.$11,900

Explanation:

Deprecation is a method used in expensing the cost of an asset.

The depreciable cost = Cost of asset - Salvage value = $123,800 - $4,800 = $119,000

The straight line rate = 1/10= 0.1 = 10%

annual straight-line depreciation = depreciable cost × straight line rate = $119,000 × 0.1 = $11,900

I hope my answer helps you

6 0
3 years ago
Tater and Pepper Corp. reported free cash flows for 2018 of $58.1 million and investment in operating capital of $41.1 million.
DENIUS [597]

Answer:

104.6 million

Explanation:

Data provided in the question:

Free cash flows for 2018 = $58.1 million

Investment in operating capital = $41.1 million

Depreciation expense = $15.5

Taxes on EBIT in 2018 = $20.9 million

Now,

EBIT

= Free Cash Flow + Investment in operating capital + Taxes - Depreciation

on substituting the respective values, we get

EBIT = $58.1 million + $41.1 million + $20.9 million - $15.5

or

EBIT = 104.6 million

8 0
3 years ago
Given a prior forecast demand value of 1,100, a related actual demand value of 1,000, and a smoothing constant alpha of 0.3, wha
Korvikt [17]

Answer:

1,030

Explanation:

Calculation for what is the exponential smoothing forecast value

Exponential smoothing forecast value = 1,000 + 0.3 x (1,100-1,000)

Exponential smoothing forecast value = 1,000 + 0.3 x (100)

Exponential smoothing forecast value = 1,000 + 30

Exponential smoothing forecast value= 1,030

Therefore the exponential smoothing forecast value will be 1,030

5 0
3 years ago
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