Answer:
$21,000
Explanation:
Calculation to determine Clampett, Incorporated's excess net passive income tax
Using this formula
Excess net passive income tax = ( Interest income + Dividends ) × Tax rate
Let plug in the formula
Excess net passive income tax = ( $60,000 + $40,000 ) × 0.21
Excess net passive income tax = $21,000
Therefore Clampett, Incorporated's excess net passive income tax will be $21,000
Answer:
c. In a month when the spot price is below $25, the company will pay the difference to the counter party
Explanation:
- Since Company X uses crude oil, the company buys the swap to hedge in the swap market, so option A is not appropriate because it buys the swap, which pays the counterparty when the spot price falls below $ 25.
- so correct option is c. In a month when the spot price is below $25, the company will pay the difference to the counter party
Magnetic, Optic, and Solid State.
Answer:
Pension expense:
= Service cost + Interest on PBO - actual return
= 40,000 + (10% * 160,000) - 15,000
= $41,000
PBO at end of year:
= Beginning PBO+ Service cost + Interest on PBO - Benefits paid
= 160,000 + 40,000 + (10% * 160,000) - 20,000
= $196,000
Pension Assets at end of year:
= Beginning PBO + Return + Contribution - Benefits
= 160,000 + 15,000 + 30,000 - 20,000
= $185,000
Answer:
purchase the machine because the expected rate of return exceeds the interest rate.
Explanation:
Given the cost of machine = $2000
If the firm borrows fund at an interest rate of 10% to buy the machine,
Interest paid on the cost of machine = 10% of $200
= 10/100 × $2000
= $200
Total amount that must be paid back for the machine by the firm = actual cost of machine + interest rate
= $2000 + $200
= $2,200
Since the additional revenue generated from the machine after all operating cost = $2,300
Profit accrued by the firm = Revenue - (actual cost of machine + interest)
Profit accrued by the firm = $2,300-$2200
Profit accrued by the firm on the machine = $100
Based on the profit margin, it can be concluded that the firm can purchase the machine because the expected rate of return exceeds the interest rate.
Note that the expected rate of return is $300 (i.e $2300 - $2000) and the interest rate of is $200 (i.e 10% of $2000)
