Ted is an agent for Waxwing Corporation, an airliner manufacturer, and is negotiating a sale with a representative of the U.S. g
overnment and with a representative of a developing country. Waxwing has sufficient capacity to handle only one of the orders. Both orders will have the same contract price. Ted believes that if Waxwing will authorize a $500,000 payment to the representative of the foreign country, he can guarantee the sale. He is not sure that he can obtain the same result with the U.S. government. Identify the relevant tax issues for Waxwing. Discuss why they could or should influence Waxwing's decision.
The Non-deductible amount of $500,000 paid to the representative of a developing country and the qualification for a 9% deduction will influence the decision of Waxwing and they will choose to do business with the US government
Explanation:
The payment of $500,000 to the representative of a developing country in order to Guarantee sales to the country is illegal and will be considered as a bribe. and any money paid as a bribe or a kickback to an employee or representative of a country it is not deductible
secondly If waxwing goes into contract with the US government they will qualify for a 9% deduction under the Domestic production activities deduction
The Non-deductible amount of $500,000 paid to the representative of a developing country and the qualification for a 9% deduction will influence the decision of Waxwing and they will choose to do business with the US government
Liquidity preference theory emphasised on the interest which investors should demand on long-term investments due to the risk they carry. According to liquidity preference theory, a decrease in the price level shifts the money demand curve leftward. A leftward movement of the money demand curve increases the overall quantity demanded. In that regard, a decrease in interest rate increases the demand for goods and services demanded.
According to my research on the Stock Market, I can say that based on the information provided within the question this situation can cause a Targeted Repurchase to occur. This is when the target firm purchases back its own stock from a hostile bidder, usually at a much higher price than what is currently offered as market value.
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Fleming corp. provided services on account. The transaction would be recorded with a credit to service revenue. The transaction will also be recorded on the accounts receivable ledger as well. Service revenue is an account used in accrual accounting that reports fee income that a company earns during a specific time frame. Accounts receivable is an account that shoes money that is owed to a company by its debtors.