<span>This type of policy will change living benefits to taxable
as ordinary income, in contrast to non-taxable living benefits that are found
in life insurance.
A modified endowment contract</span> (MEC) refers to a
tax requirement of a life insurance policy where the policy has been financed
with more money than the money which is accepted under federal laws.
Answer:
Cost savings in sourcing from Country A = $0.5 million ($57.5 - $57 million)
Explanation:
Sourcing from Country A:
Purchase price = $0.55 per unit
Shipping = $0.02
Total Cost = $0.57
Cost of 100 million units = $57 million
Sourcing from Country B:
Purchasing price = $0.44 ($0.55 x 80%)
Shipping = $0.06
CIF Tariff = 15% = $0.075 ($0.5 x 15%)
Total Cost = $0.575
Cost of 100 million units = $57.5 million
Sourcing from Country A is more beneficial than sourcing from Country B with reduced product cost, but increased shipping and additional tariff. Whereas Country A gives a total cost for 100 million units of $57 million, sourcing the same units from Country B gives a total cost of $57.5 million. The savings of $0.5 million is substantial that no company would like to lose unless the goods from Country B are of higher quality than those from Country A.
Answer:
Firm A will spend $4,000.
Explanation:
The chemical dumped into the river daily by
Firm A = 50 ton
Firm B = 50 ton
ATQ,
The clean-up cost of Firm B before getting into the river = $50 per ton.
= $50 x 50tons = $2500.
2). Pollution rate as per government = $75 per ton
No. of permits = 40
= $75 x 40
= $3000
As we know,
The clean-up cost of Firm B is lesser than the cost of pollution permits with $500($3000 - $2500). Cleaning up the pollution would be best because it is a cheaper alternative..
The cleanup cost of Firm A per ton = $100 per ton.
= $100 x 50tons
= $5000
2). Pollution rate as per the govt. = $75 per ton
= $75 x 40 permits
= $3000.
The clean-up cost of Firm A is greater than the cost of pollution permits with $2000. Thus, the cleaning up the pollution would cost more for Firm A. Thus, they must go for purchasing the permits.
3). Purchasing 40 pollution permits would cost
= $100 x 40
= $4000.
