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Virty [35]
3 years ago
8

What would happen if a state or municipality suddenly lost its tax base? Explain if this would have any impact on it's cost of b

orrowing funds. Why?
Business
1 answer:
Yuri [45]3 years ago
3 0

Answer:

Following are the responses to the given question:

Explanation:

The tax base seems to be the amount that is added to both the income tax, that is which tax rate is the percentage of national economy collected as just a tax. Consequently, it is important to find an income tax that understands the tax base.

Whether this amount of tax would pay is not declared or decided if the state or city suddenly loses its local economy.

Impact mostly on the cost of credit

Its cost of debt before tax rebate funds = interest amount on the debt – any reduction in income tax which rose because of deductible profits. The costs of lending are real games calculated in anticipation of tax, however, the difference is DEDUCTIBLE in INTEREST EXPENSES.

This tax rate also increases the cost of lending and gives more income protection.

It's because when taxes become available, the company can save money on tax returns as it ultimately removes some profits.

Conclusion:

However it is lost about the tax base, however, the judgment could not be made afterward the amount to borrow as debt could be evaluated of that "TAX REVENUE OFFSET."

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Kegler Bowling installs automatic scorekeeping equipment with an invoice cost of $190,000. The electrical work required for the
Ulleksa [173]

Answer:

The cost recorded for the equipment=$229,550

Explanation:

The total recorded cost of the automatic equipment has to include the purchase cost and other additional associated costs that come with the equipment. This can be expressed as;

T=P+A

where;

T=total cost

P=purchase cost/invoice cost

A=additional costs(electrical work cost+delivery cost+sales tax+repair cost)

In our case;

T=unknown

P=$190,000

A=(20,000+4,000+13,700+1,850)=$39,550

replacing;

T=190,000+39,550=229,550

The total cost=$229,550

The cost recorded for the equipment=$229,550

7 0
3 years ago
Hurlburt Corporation renewed an insurance policy for 3 years beginning July 1 and recorded the $81,000 premium in the prepaid in
Slav-nsk [51]

Answer:

B. Debit insurance expense for $13,500 and credit prepaid insurance for $13,500.

Explanation:

If 6 months past from the beginning of the contract then these past 6 months must be reflected as expenses in the balances.

$13,500 reflect the expenses of the past 6 months from July 1 to December 31, then the entry Debit insurance expense for $13,500 and credit prepaid insurance for $13,500 reflect the proper balances at the end of the year.

8 0
3 years ago
Bob is hired to do computer sales for an electronics store. He agrees that if he leaves his employment, he will not work for ano
Simora [160]
A. covenant not to compete
4 0
3 years ago
XYZ stock is trading at $25.75 and XYZ Jul 25 calls are trading at a premium of $2. What is the time value of the Jul 25 calls
RSB [31]

Answer:

$125

Explanation:

Time value = Premium - Intrinsic value

Premium. = 2 or $200 i.e 2×100

Intrinsic value = 75

= $200 - $75

= $125

5 0
3 years ago
Suppose Stark Ltd. just issued a dividend of $2.57 per share on its common stock. The company paid dividends of $2.20, $2.31, $2
crimeas [40]

Answer:

Answer:

Growth rate (g) = n-1√(<u>Latest dividend)</u>     - 1

                                      Current  dividend

                          = 4-1√($2.49/2.20)   -1  

                         = 3√(1.1318)  -1  

                        = 1.04  -  1

                        = 0.04 = 4%

Ke = Do<u>(1 + g) </u>  +  g

               Po

Ke =  $2.57(<u>1  +  0.04</u>)  + 0.04

                         65

Ke = 0.04 + 0.04

Ke = 0.08 = 8%

Explanation:

In this  case, we need to calculate the growth rate using the above formula. Then, the cost of equity will be  calculated. Cost of equity is a function of current dividend paid subject to growth rate divided by current market price.

Explanation:

5 0
3 years ago
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