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DochEvi [55]
2 years ago
5

At the start of the current year, Company A purchased 30% of Company B for $45 million. At the time of purchase, the carrying va

lue of Company B's net assets was $75 million. The fair value of Company B's depreciable assets was $15 million in excess of their book value. For this year, Company B reported a net income of $75 million and declared and paid $15 million in dividends.
The total amount of additional depreciation to be recognized by SBC over the remaining life of the assets is: _________

a. $4.5 million.
b. $15 million.
c. $27 million
d. None of these answer choices are correct.
Business
1 answer:
brilliants [131]2 years ago
5 0

Answer: a. $4.5 million

Explanation:

The depreciation to be recognized is;

= Value of Depreciable assets * Percent of company owned

= 15,000,000 * 30%

= $4,500,000

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Bond issue costs reduce the cash proceeds from the issuance of debt. do not affect the cash proceeds from the issuance of debt.
tia_tia [17]

Answer:

increase the effective interest rate of borrowing

Explanation:

Cost of debt refers to the total cost a company incurs for raising debt which includes fixed coupon rate payments to bondholders.

Cost of debt is calculated using the following formula:

K_{d} = \frac{I(1\ -\ t)}{NP}

wherein K_{d} = Cost of debt

             I = annual rate of coupon payment

             t= tax rate

            NP = Net proceeds which is par value less issue expenses

when NP is taken as the base, while calculating cost of debt, it is termed as effective interest rate.

So, bond issue costs reduce the net proceeds and thus, increase the effective interest rate of borrowing for the issuer company.

4 0
2 years ago
From the perspective of the parent corporation, contrast the tax consequences of a subsidiary liquidation under the general nonr
erik [133]

Answer:

Section 338 allows the corporation to purchase stock and retain the basis of assets. It also allows adjusting the basis for the assets. Under section 338 the, if the corporation sold its assets, the transactions related to sale will be subjected to double tax. Whereas, if the corporation cause liquidation for the target asset's and then undergo for a sale is subjected to single tax.  

6 0
3 years ago
All of the following are methods of evaluating the risk of a project except multiple choice the net present value profile a mont
Eduardwww [97]

The answer choice that is NOT a method of evaluating the risk of a project is its B. Profile

<h3>What is Risk Management?</h3>

This refers to the identification of risk in any venture and the evaluation of the response to risk factors.

Hence, we can see that when a person is evaluating the risk of a project, he would have to check the net present value, the coefficient of variation, etc, but the evaluation of the profile is not a method of risk evaluation of the project.

Read more about risk management here:

brainly.com/question/13760012

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6 0
2 years ago
Activity based costing _____________
Ilia_Sergeevich [38]

Answer:

1. groups costs into meaningful buckets that are then distributed based on the activity or product they support.

Explanation:

Activity based costing basically categorizes various overheads into different activities, that leads to charge of overheads based on different activities.

In this manner overheads that shall be charged on some standard products based on the activities involved is charged accordingly, and not based on standard overhead allocation rate.

Basically the overheads are divided into various activities and then distributed  to each product based on the volume of activity in the manufacturing process of such activity.

7 0
2 years ago
What is valuable goods
tankabanditka [31]
Anything that is possessed with funds or luxury or heirloom items
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3 years ago
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