The existence of pre-tax cost of debt and post-tax cost of debt is due
to the acknoledgement of the tax benefit from issuing debt.There is no
tax benefit from paying divdends,so it makes no sense talking about
pre-tax,post-tax cost of equity for a firm.When you think about cash
flow to equity you can only assume that the taxes owed by the company
have already been paid.Now, the taxation over the income of the
shareholder is a whole different issue that does not take place in this
discussion,since it is not taken in consideration either in cost of
equity or cost of debt.
The American Institute of Architects
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Answer:
Today's organizations can be divided into three groups, which are-Profit, Nonprofit, and Governmental organizations.
Explanation:
For-profit businesses, non-profit organizations, and governments can all play unique and valuable roles in society. However there are certain challenges that are best addressed by cooperative ventures involving all three sectors.
The operating activities generated $25,000 in net cash.
A company's liquidity position is represented by net cash. It is determined by subtracting the current liabilities from the cash balance shown on the financial accounts of the company at the end of a specific period, and analysts and investors use it to gauge the firm's financial and liquidity status.
It differs from net cash flow, which is determined as the cash the company produced during a specific time period after paying all of its operational, financial, and capital obligations, including shareholder dividends.
The company's cash plus marketable investments less its total debt is another way to calculate net cash (short-term borrowings plus long-term borrowings). The company will be able to honor its borrowings if they become immediately due if this figure is positive, which indicates that the company is in good financial condition. If this number is negative, on the other hand, it indicates that the business does not have enough cash on hand to pay off all of its borrowings right away.
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For questions a, b
- An additional $320 billion in spending is required.
- Reduced consumption of $320 billion is needed for this to occur.
<h3>By how much must investment increase?</h3>
Generally, the equation for the investment accounts is mathematically given as
x=($1tri / $8 tri) * 100
x= 12.5%
Now we know that the answer lies in the fact that the investment rate may be increased by 4% for every 1% rise in economic growth.
Therefore,
=($8 trillion * 0.165%)
=$1.32 trillion
The additional investment is 3.2% of GDP.
Therefore, an increase in investment of ($1320 - $1000) billion is needed to raise GDP growth by 1 percentage point.
This means an additional $320 billion in spending is required.
(b).
In conclusion, Since we were already aware that we would need to cut down on our spending in order to make this investment, we may conclude that:
Reduced consumption of $320 billion is needed for this to occur.
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