Answer: The fair market value of the free tour to Costa Rica is a taxable income.
Professor Vanessa Lazlo won the free tour in a draw, where a prize is awarded by chance.
Publication 525 of the IRS defines taxable and non taxable income.
The IRS lists winnings from raffles and lotteries under Other income.
It also declares that the fair market value of winnings from raffles and lotteries are winnings from gambling. Hence the fair market values of non cash prizes are taxable and must be included as income.
Answer:
Explanation:
Fixed costs - will remain similar no matter of output amount
Variable costs - vary with the change in output
Average cost=(Fixed cost(FC) + Variable cost(VC))/number of units produced
VC = VC per cup of coffee served *cup of coffee served in a week
Total Cost(TC)= FC+VC
Average cost=TC/Cup of coffee served in a week
1. Let's calculate for 2000 cups of coffee:
FC remain the same! = $1200
VC=0.22*2000= $440
TC=FC+VC= 1200+440= $1640
Average cost of 1 cup of coffee= TC/#of cups=1640/2000=$0.82
2. Calculation for 2100 cups:
FC=1200
VC=0.22*2100=462
TC=1200+462=1662
Av cost=1662/2100=0.79
3. Calculation for 2200 cups:
FC=1200
VC=0.22*2200=484
TC=1200+484=1684
Av cost=1684/2200=0.77
As the number of cups increased from 2000 to 2100, the average cost per cup devreased 0.82 to 0.79. Then when number of cups increased to 2200, average cost decreased to 0.77. The reduction is due to the variable cost
Answer:
-$300 million
Explanation:
Change in net working capital (CNWC) = $100 million
Capital Expenditures (CE) = $200 million
Assuming no depreciation expenses, the free cash flow (FCF) is given by:
Since no revenues are expected until the next year, EBIT = 0.
The project's free cash flow today is -$300 million.
Answer:
The statement which is true about price war is A) firms that have to deal with the possibility of price often have sticky prices.
Explanation:
A price war can be defined as a situation where two or more firms compete with each other over the prices of goods and service by reducing their prices to earn profit or gain or maintain market share.
Sticky prices also called as price stickiness , it is a situation where prices of goods and services doesn't change quickly when there are shifts in demand and supply curve.
Statement A is true because firms that are engaged in wars have sticky prices because they don't want to change their prices more often or too low such that they start losing market share or incurring losses.
Answer:
The percentage change in the average number of units in the process is 125%.
Explanation:
Based on Little's law;
Average inventory = average flow rate * average flow time
Let inventory = I, average flow rate = R and average flow time = T
Thus, I = R*T = RT
Now, Average flow rate and average flow time are increased by 50%
R' = R + 0.5R = 1.5R
T = T + 0.5T = 1.5T
So, inventory, I' = 1.5R*1.5T=2.25RT
Hence, the percentage change in the average number of inventory units in the process.
% change = I' - I = 2.25RT - RT= 1.25RT or 125%
Thus correct answer = 125%
