Answer:
Lancashire Railway Company (LRC)
Lancashire Railway Company (LRC) should reject the project. The basis for rejecting Division H's project is that its return (12%) is less than the risk-based cost of capital for the division (14%).
Explanation:
a) Data:
Division L's weighted-average cost of capital = 8%
Division H's weighted-average cost of capital = 14%
Weight of Division L = 50%
Weight of Division H = 50%
Company composite weighted average cost of capital = 11% (8% * 50%) + (14% * 50%)
Expected return from a proposed project for Division H = 12%
Answer:
B) Only statement II is correct.
- II. Has $20,000 of taxable income from Corporation Z.
Explanation:
One of the disadvantages of a C Corporation is that their owners (stockholders) are double taxed. That means that the corporation is taxed and then the stockholders are taxed depending on the dividends that they receive. In this case, Walter has $10,000 of taxable income from Corporation X (= $50,000 x 20%).
On the other hand, sole proprietorships, partnerships, limited liability companies and S Corporations are not taxed, they are pass through entities whose owners are taxed directly. In this case, Walter owns 20% of Corporation Z, therefore he must pay taxes on 20% of taxable income = $100,000 x 20% = $20,000.
Answer:
trying to close the sale
Explanation:
When someone is closing a sale, he/she is trying the complete the sales process by effectively getting a purchase order. In this case, the salesperson is trying to convince the client to finally place an order for 20 cases of Ecco brand golfing shoes. The whole selling process is carried out to finally be able to close the sale, it is the climax of the sales process, the salesperson either makes it or not.
Answer:
The tax that must be added to the C corporation tax liability for the year before the S election = $49000*1/4=$12250
The rest of the three instalments of $12250 each will be paid with Lent Corporation's next three tax returns
Explanation:
FIFO Value/basis =$650000
LIFO value/basis =$510000
Difference =$140000
35% Tax =$140000*35% = $49000
The tax that must be added to the C corporation tax liability for the year before the S election = $49000*1/4=$12250
The rest of the three instalments of $12250 each will be paid with Lent Corporation's next three tax returns
Answer:
$22
Explanation:
The total cost of skipping practice and going to the carnival will be computed by adding the forfeited earnings from practice plus the carnival admission fee.
Total cost = $13 + $9 = $22.
Therefore, if the practice had not been skipped and the carnival not attended, $22 would have been saved.
