Answer:
$220,000
Explanation:
Calculation to determine How much income from self-employment did Samuel earn from STU
Using this formula
Income from self-employment =Guaranteed payment received+(Interest rate*Ordinary income)
Let plug in the formula
Income from self-employment=$120,000+(25%*$400,000)
Income from self-employment=$120,000+$100,000
Income from self-employment=$220,000
Therefore the amount of income from self-employment that Samuel earn from STU is $220,000
Answer:
D) purchasing euro call options.
Explanation:
If Lazer purchased euro call options it would be basically buying the right to purchase euros at a specified currency exchange rate. This way Lazer would know what is the maximum amount it will have to pay for the euros it needs to cover its debts. The call option give the buyer the right to purchase the euros but not the obligation, so if the euro depreciates, then Lazer can simply decide to not use the call option.
Answer:
A perfectly competitive firm will minimize its losses by shutting down when: P < TFC at the profit-maximizing level of output. P < MC at the profit-maximizing level of output.
Explanation:
A firm will choose to implement a production shutdown when the revenue received from the sale of the goods or services produced cannot cover the variable costs of production. In this situation, a firm will lose more money when it produces goods than if it does not produce goods at all. Producing a lower output would only add to the financial losses, so a complete shutdown is required. If a firm decreased production it would still acquire variable costs not covered by revenue as well as fixed costs (costs inevitably incurred). By stopping production the firm only loses the fixed costs.
Answer:
The correct answer is false
Explanation:
Interest payment is an expense incurred by a business as a cost of borrowing money to finance the business. It is an allowable expense for tax purposes. Hence it is deducted from revenue before tax liability is computed.
Interest expense is a tax shield as it helps the business to reduce its tax liability.
Dividends are portion of a company profit paid to shareholders. Dividends are paid from profit after tax. Therefore cannot be used to reduce tax liability.
The correct answer is false
