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3 years ago

MM Proposition I with corporate taxes states that:

Business

1 answer:

OLEGan [10]3 years ago

8 0

Answer:

d.) I and II

Explanation:

The first proposition can be regarded as proposition that gives a clam that capital structure of a company has no impact on the value. The value of a company is been known as present value of future cash flows when it's calculated, then it cannot be affected by capital structure. It should be noted that MM Proposition I with corporate taxes states that capital structure can affect firm value by an amount that is equal to the present value of the interest tax shield.

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Sharon made a $160,000 interest-free loan to her son, Todd, who used the money to pay for his masters at Baruch. Todd’s only sou

34kurt

Answer:

b. Sharon must recognize $3,000 (0.05 x $60,000) of imputed interest income on the below- market loan.

Explanation:

When a family member makes an interest free loan, the IRS will calculate imputed interest, and that is generally considered a gift. When someone makes a gift, they are responsible for paying any applicable taxes.

In this case, Sharon will have to pay gift taxed for the imputed interest resulting form the loan.

6 0

3 years ago

Mission Foods produces two flavors of tacos, chicken, and fish, with the following characteristics:

postnew [5]

Answer:

1. $858,000

2. Chicken = 24,000 units and Fish = 36,000 units

Explanation:

The computation is shown below:

1. The anticipated level of profits for the expected sales volumes is

= Expected sales of chicken × (Selling price per taco - Variable cost per taco) + Expected sales of fish × (Selling price per taco - Variable cost per taco) - total fixed cost

= 200,000 × ($3 - $1.50) + 300,000 × ($4.50 - $2.25) - $117,000

= $300,000 + $675,000 - $117,000

= $858,000

2. The break even volume is

Let we assume the sale units be X

So, total units sold for chicken = 40X

And, for the fish it is = 60X

Sale units of chicken × (Selling price per taco - Variable cost per taco) + Sale units of chicken × (Selling price per taco - Variable cost per taco) = Total Fixed cost

0.40X × (3 – 1.50) + 0.60X × (4.50 – 2.25) = $117,000

0.60X + 1.35X = $117,000

1.95X = $117,000

So, the X is 60,000 units

So for chicken it is 60,000 × 40% = 24,000 units

And for fish it is 60,000 × 60% = 36,000 units

7 0

4 years ago

Select all that apply.

VladimirAG [237]

Money is anything that people are willing to accept to use for payment for goods and services.The purpose of money can be described as follows:
store of value - money is a way of saving for future purchases
unit of account - money represents the real value (or cost) of any economic item.
medium of exchange- Money serves as a medium of exchange.

3 0

3 years ago

Read 2 more answers

Geraldine inherited a piece of land when her father Albert died on July 26, 2015 The FMV of the land at the date of death was $4

podryga [215]

For the initial purchase, Geraldine already has the gain of
$40,000 - $20,000 = $20,000
Because he succcesfully bought the land below the market value.

After the sale, the total gain would be

$20,000 + ($45,000 - $20,000)

$20,000 + $ 25,000

= $45,000

7 0

3 years ago

A competitive firm has been selling its output for $10 per unit and has been maximizing its profit. Then, the price rises to $14

LenaWriter [7]

Answer:

The answer is 3. Quantity of output is higher that it was previously

Explanation:

A perfectly competitive firm acts as a price taker, so its calculation of total revenue is made by taking the given market price and multiplying it by the quantity of output that the firms chooses.

3 0

3 years ago