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kiruha [24]
3 years ago
9

Say you are planning to start a new business. You expect to have losses for the first 2 years and then achieve significant profi

ts. But, in order to grow, you will need to be able to keep the after-tax earnings. You also want to limit your liability. How will you structure your business regarding issuing debt versus increasing equity and why
Business
1 answer:
Fofino [41]3 years ago
8 0

Answer:

Answer is explained in the explanation section below.

Explanation:

Solution:

It is perfectly natural that the loss will occur at the start. Since it is not able to pay fixed interest obligations, a preferential or equity capital increase is recommended. The debt fund will create a financial crisis in the capital structure because it will be difficult for the company to fulfil its payment obligation on the initial stage.

The composition of debt capital will contribute to a certain tax savings, but it will certainly increase the overall outflow of the fund.

For Example:  

Total Capital is 1,000,000 costing of 500,00 debt and 500,000 equity and 40 % tax bracket.  

Suppose total return is 10% on capital.

Earnings for the year :   1,000,000 * 10 %  =   100,000

Interest obligation (assume borrowed at 12 % )      = 60,000

Profit before tax                                                        = 40,000

Tax at the rate  40%                                                 =  16,000

Earning after tax available for growth                     = 24,000

Total capital only consists of equities in this example.

The earnings will be same                                        =  100,000

Less tax at the rate 40 %                                           =  40,000

Net earnings available for future growth                 = 60,000

We have an extra earnings available for future growth is 36,000 (60,000 - 24,000).

Ignore tax saving 24,000 (40,000 - 16,000) Because the enterprise requires more for future growth following tax earnings at the initial stage.

So,

The business was structured to maximize the use of own resources instead of borrowing the fund.

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A manufacturer makes lightbulbs and claims that their reliability is 98 percent. Reliability is defined to be the proportion of
quester [9]

Answer:

The expected number of nondefective lightbulbs is 980 out of a random sample of 1,000 bulbs.

Explanation:

Hi, if the company is right, this is the operation that we need to do.

Bulbs(operating)=1,000*0.98=980

So, we are expecting 980 working bulbs out of a sample of 1,000

Best of luck

4 0
3 years ago
C) What are the major jobs of a nurse?​
ivanzaharov [21]

Answer:

1) Conduct physical exams

2) Take a detailed heath care histories

3) Provide counselling and health care to patients

4) Listening to the patients and analysing the physical and emotional needs

6 0
3 years ago
When partners representing multiple jurisdictions or agencies work together to establish the Internet objectives, what type of c
kondaur [170]

In a Unified Command, members representing multiple jurisdictions and agencies work together to establish: the Internet objectives.

<u> Explanation:</u>

When  two or more persons shares the incident commander role is a Unified Command authority structure in an Incident Command System. It is a way for carrying the commanding activities by which the agencies and jurisdictions that are responding will be working altogether for the establishment of internet objectives.

When there exists incidents having many jurisdictions and agencies that this type of command is very essential. The persons sharing the authority will be working together without affecting the responsibilities and authority of the agencies individually.

3 0
3 years ago
which of the following would most likely have caused the production possibilities frontier to shift outward from a to b? group o
Anna71 [15]

General technological advance is most likely to cause the production possibilities frontier to shift outward from a to b.

Technology has always been vital for organisations, but in recent years, that importance has increased significantly. By definition, technology is the practical application of scientific knowledge, and it is obvious that in order for businesses to remain competitive, they must adopt new technologies. The importance of new technology for organisations can be attributed to a number of factors. First, firms can improve their production and efficiency by utilising modern technologies. This is so that workers may concentrate on other duties because new technologies sometimes automate operations that were previously performed manually. Additionally, by lowering their dependency on costly manual labour, new technology can assist firms in saving money. Finally, firms can frequently access new markets and clients thanks to new technologies.

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8 0
1 year ago
Sienna’s take home pay is $13,400. The company deducts $200 from her pay as part of her voluntary deductions. Her total tax dedu
dlinn [17]

Answer:

Gross pay= $20,000

Explanation:

She takes $ 13,400.

the company deducted $200 as voluntary deductions.

She had $13600 after paying tax 32%which is equivalent to 68%

$                      %

13600              68

x                      100

x= 13600*100/68= 1360000/100= $20,000

Her gross pay is $ 20,000

6 0
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