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3 years ago

10

From a corporation’s point of view, does the tax treatment of dividends and interest paid favor the use of debt financing or equ

ity financing?.

1 answer:

antoniya [11.8K]3 years ago

3 0

It favors Equity financing

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Raner, Harris, & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm

Blababa [14]

Explanation:

1. The computation of the company wide break-even point in dollar sales is shown below:

Break even point = (Traceable fixed expenses + Common fixed expenses ) ÷ (Profit volume Ratio)

where,

Contribution margin = Sales - Variable expenses

= $450,000 - $225,000

= $225,000

And, Profit volume ratio = (Contribution margin) ÷ (Sales) × 100

= ($225,000) ÷ ($450,000) × 100

= 50%

So, the company wide break even point in dollar sales is

= ($126,000 + $63,000) ÷ (50%)

= $378,000

b. For Chicago

Break even point = (Traceable fixed expenses) ÷ (Profit volume Ratio)

where,

Contribution margin = Sales - Variable expenses

= $150,000 - $45,000

= $105,000

And, Profit volume ratio = (Contribution margin) ÷ (Sales) × 100

= ($105,000) ÷ ($150,000) × 100

= 70%

So, the company wide break even point in dollar sales is

= ($78,000) ÷ (70%)

= $111,429

For Minneapolis

Break even point = (Traceable fixed expenses) ÷ (Profit volume Ratio)

where,

Contribution margin = Sales - Variable expenses

= $300,000 - $180,000

= $120,000

And, Profit volume ratio = (Contribution margin) ÷ (Sales) × 100

= ($120,000) ÷ ($300,000) × 100

= 40%

So, the company wide break even point in dollar sales is

= ($48,000) ÷ (40%)

= $120,000

c. The company wide break even point in sales dollars is $378,000 and the total is $111,429 + $120,000 = $231,429

So, the company wide break even point is greater than the sum of the Chicago and Minneapolis break-even points due to the common fixed expenses

7 0

4 years ago

Write 2 paragraphs about comparing technology with checks when it comes to running a company

hjlf

Answer:

Checks like money-? Because then, you are talking prices. The higher the price the more it most likely is. If you run a company, to you you want to make the higher quality things more, unless you just want to scam somebody. Thats all i can do for now, i can finish later maybe.

Explanation:

Checks like money-?

3 0

3 years ago

Tobin Supplies Company expects sales next year to be $520,000. Inventory and accounts receivable will increase $90,000 to accomm

elena-s [515]

Answer:

$17,200

Explanation:

Calculation to determine How much external financing will Tobin Supplies Company have to seek

Net Income=[$520,000 x 20%]

Net Income = $104,000

Dividend Pay-out= [$104,000 x 30%]

Dividend Pay-out = $31,200

Additions to Retained Earnings = [$104,00 - $31,200]

Additions to Retained Earnings=$72,800

Now let determine the The External Financing Needed using this formula

The External Financing Needed = Increase in Assets – Additions to retained earnings

Let plug in the formula

The External Financing Needed= $90,000 - $72,800

The External Financing Needed= $17,200

Therefore The External Financing Needed is $17,200

7 0

3 years ago

Martin wrote Dall and offered to sell Dall a building for $200,000. he offer stated it would expire 30 days from April 1. Martin

ryzh [129]

Answer:

If the offer is rejected by the Dall then the offer is no more in place. The particular reason is that Martin is not required to tell Dall that the offer is no more in place. Suppose Martin is wishing to close his offer and till now Dall has not declined the offer. So Martin will have to communicate Dall that the offer is been closed. If Dall has communicated Martin that he has rejected the offer, then this means the offer essence has vanished. Hence Martin has no liability towards Dall, if Dall sues him.

7 0

3 years ago

Tipton Company makes a deal with Patton Company to purchase 100 canvas tarps. Patton's competitor, QC Industries, tells Tipton C

Otrada [13]

Answer: Patton will sue QC industries for tortious interference with a contract

Explanation:

Since there has been a contract which had already been signed, then if QC industries damages Patton Company's image, Patton will sue QC industries for tortious interference with a contract.

Tortious interference, is also refered to as the intentional interference with a contract and this occurs when the business relationship or contract that one has with a third party is intentionally damaged by another person. In this case, QC intentionally damages Patton's contract and therefore, Patton will sue QC industries for tortious interference with a contract.

6 0

3 years ago