Answer:
Franchise
Explanation:
Franchise is firstly permitted by government. Franchise gives authority to sell the product by the brand name which means one franchiser person gives rights to another people to use his trade name, the product rights and formulas and set the specific target in a given geographic area to another person for the benefit of the organization.
Which of the following is included in the statement of cash flows? a.Cash flows from investing activities b.Total changes in stockholders' equity c.Changes in retained earnings d.Total assets
Answer: A. Cash flow from investing activities
Explanation:
When we prepare a cash flow statements the sum of following heads are ascertained:
Cash flow from operating activitiesCash flow from investing activitiesCash flow from financing activitiesThe total sum of these three heads provide the net increase or decrease in cash.
Now we add the openening balance of cash to ascertain the closing cash balance which is reported to the final balance sheet of the company under the head Current Assets.
cash flow from investing activities indicates the inflow and outflow of cash of the business in sale and purchase of investments and assets.
DFW Security Services targets high income professionals with custom-designed security systems. These systems are positioned as the premier systems availabe on the market. DFW Security employes a highly refined marketing mix to support its intended market position with target customers. What has just been described amounts to DFW’s marketing mix?
The given statement "DFW Security Services targets high income professionals with custom-designed security systems. These systems are positioned as the premier systems available on the market. DFW Security employees a highly refined marketing mix to support its intended market position with target customers. What has just been described amounts to DFW’s marketing mix" is FALSE
Explanation:
DFW Security Services provides practitioners with high-income networks for tailored security systems. Such solutions are put on the market as the leading systems. For its purpose of supporting the target customers, DFW Health employs a highly refined marketing blend.
It is the DFW Marketing Strategy that has just been identified.
A marketing strategy corresponds to an overall strategy for attracting and turning prospective buyers into clients of the goods or services provided by the company.
Joe is working on a design team that uses a computer-aided design (CAD) system. Joe has been complaining that it takes too long to perform tasks such as panning, rotating, and zooming. You have been asked to look at Joe's computer and to make any changes required to increase Joe's productivity.
Answer:
Add a very high-end video board.
Explanation:
Joe used the CAD system for his work. Joe required A good video graphics card to run his CAD system easily.
High-end video graphics cards are normally used to increase the video performance of our system.
In the case of Joe, he needs a system that runs faster with the CAD program, because CAD is used for designing.
If a company created a product marketing campaign which exaggerated the actual benefits and features of a product and misrepresented the quality of the item, what could be the market’s reaction?
Answer: Loss of customers
Explanation: First of all, this would be an unethical thing to do, because the product will never meet the standard which it has been advertised to be.
This would therefore lead to a loss of customers due to the fact that their trust has been violated. They will also definitely feel cheated and exploited.
In the end, the loss of customers will lead to loss of profit for the company.
Harmonization of accounting standards:_______. A. Is the same as convergence of accounting standards.B. Always ensure resulting of comparable financial statements internationally.C. Forces accounting difference to be resolved through litigation.D. Refers to the reduction of alternatives while retaining a high degree of flexibility in accounting practices.
Answer:
the correct answer is D. Refers to the reduction of alternatives while retaining a high degree of flexibility in accounting practices.
Explanation:
The harmonization refers to having a high degree of variation or flexibility in the accounting standards. this allows the standard to be implemented by many organizations in various scales, sizes and industries without affecting their financial performance.
The following costs were incurred in May:
Direct materials $ 33,000
Direct labor $ 13,000
Manufacturing overhead $ 23,000
Selling expenses $ 16,000
Administrative expense $ 34,000
Prime costs during the month totaled:
Answer:
$46000
Explanation:
Given: Direct materials $ 33,000
Direct labor $ 13,000
Manufacturing overhead $ 23,000
Selling expenses $ 16,000
Administrative expense $ 34,000
Prime cost include all the cost of company that are directly used in the production of goods and serviced, like, cost of direct material, cost of direct labor, etc which are directly involved in the manufacturing of product.
Now finding prime cost for the month of May.
Prime cost= [tex]Direct\ material+direct\ labor[/tex]
⇒ Prime cost= [tex]33000+13000[/tex]
∴ Prime cost= [tex]\$ 46000[/tex]
Hence, the total prime cost for the month of May is $46000.
Which of the following budgets are needed to calculate unit product costs? Direct labor budget Direct materials budget Cash budget Selling and administrative budget Manufacturing overhead budget
Answer:
The following budgets are needed to calculate are as follows:
Direct labor budget
Direct materials budget
Manufacturing overhead budget
Explanation:
The three budgets put together are known as production budget which are as a result of sales budget.
When a company determines its projected sales ,it goes ahead to prepare its production budget in order to fulfill forecast sales as contained in the sales budget.The quantity to be manufactured is based on the opening inventory for the period, forecast sales quantity as well as the desired ending inventory quantity.
In order to determine production level,the opening inventory is added to forecast sales and desired ending inventory is subtracted to arrive at the estimated production units for the period.
Final answer:
Unit product costs are calculated using the Direct Labor Budget, Direct Materials Budget, and Manufacturing Overhead Budget. These provide the necessary cost details related to direct production expenses and overheads.
Explanation:
To calculate unit product costs, certain budgets are required for acquiring detailed cost information. Specifically, the Direct Labor Budget, the Direct Materials Budget, and the Manufacturing Overhead Budget are essential. These budgets help determine the direct costs and overhead costs associated with producing a single unit of product. The Direct Labor Budget includes the costs of employees who are directly involved in the production process. The Direct Materials Budget accounts for the raw materials used in the manufacturing of the product. The Manufacturing Overhead Budget comprises all the additional costs necessary for production that are not directly tied to direct labor or materials. This can include items such as utilities, depreciation, and maintenance expenses. The Cash Budget and the Selling and Administrative Budget are not typically used in the calculation of unit product costs, as they deal with cash flow and non-production costs respectively.
The National Egg Association has been promoting the benefits of eggs for many years. It aims to educate customers about the nutritional values of eggs through ads which are aired in several states. It is making use of
Answer:
Education-based marketing
Explanation:
Education-based marketing unlike traditional marketing which is done through selling-based messages, are done by sharing important information and facts that help customers make a good buying decision.
Education-based marketing is the sharing of knowledge with the purpose of building trust. It is a strategy that establishes credibility and trust with your customers by using educational messages particularly on the benefits they stand to gain by using a product or service.
Gomer loses his job as a road construction worker and cannot find another position with equivalent pay and benefits. As a result, he is still checking the want ads and reporting to the unemployment office on a weekly basis. He is considered to be:__________.A. laid off.B. underemployed.C. out of the labor force.D. unemployed.
Answer:
The correct answer is (D)
Explanation:
Gomer losses his job and after that, he couldn't find a suitable job with equivalent pay and benefits. He is still looking for a desirable job and he still checks the want ads and report to the unemployment office every week. This shows that Gomer is still unemployment and looking for a suitable job to start his career.
Answer:
It’s underemployed
Explanation:
Suppose the nation of Sugarland consists of 50,000 households, 10 of whom are sugar producers. Arguing that the sugar industry is vital to the national economy, sugar producers propose an import tariff. The loss in consumer surplus due to the tariff will be $100,000 per year. The total gain in producer surplus will be $25,000 per year.What is the gross cost per household per year of the proposed policy? Round your answer to the nearest dollar.
Answer:
$2 per household per year
Explanation:
Data provided in the question
Number of households who are sugar producers = 50,000
Loss in consumer surplus = $100,000
Total gain in producer surplus = $25,000
Now considering the above information, the gross cost per household per year is
= Loss in consumer surplus ÷ Number of households who are sugar producers
= $100,000 ÷ 50,000 households
= $2 per household per year
The demand schedule for a good: Group of answer choices indicates the quantity that people will buy at the prevailing price. indicates the quantities that suppliers will sell at various market prices. is determined primarily by the cost of producing the good. indicates the quantities that will be purchased at alternative market prices.
Answer:
indicates the quantities that will be purchased at alternative market prices.
Explanation:
The demand schedule is a tabular description of the quantities of goods that would be purchased by consumers at different prices. The higher the price, the lower the quantities demanded and the lower the price, the higher the quantity demanded.
The demand for A good is the quantity that people will buy at the prevailing price.
The supply schedule indicates the quantities that suppliers will sell at various market prices.
Supply is determined primarily by the cost of producing the good.
I hope my answer helps you
Contributory negligence: a. can be a partial defense in product liability cases for negligence. b. is the same as comparative negligence. c. is no longer permitted as evidence in suits. d. none of the above
Contributory negligence can be a partial defense in product liability cases for negligence.
Option: A
Explanation:
In certain regions of jurisdiction of common law, contributory negligence is a safeguard against a negligence based allegation of torture. When eligible, the defense absolutely excludes claimants from any compensation when they respond by their own fault to their own damage. Thus it is a form of liability defense where the defendant may claim that a plaintiff has in some way participated to his own damages or liabilities. A complainant who is deemed to be "contributory incompetent" shall be disqualified from accepting an award of damages.
Suppose again that furniture production is more capital-intensive relative to clothing production, which is more labor-intensive. If the relative price of furniture to clothingrises, this will:___________.A. lower the incomes of both labor and capital owners.B. raise the income of labor owners.C. raise the income of both labor and capital owners.D. raise the income of capital owners.
Answer:Option (D). raise the income of capital owners
Explanation: Suppose again that furniture production is more capital-intensive relative to clothing production, which is more labor-intensive. If the relative price of furniture to clothing rises, this will raise the income of capital owners.
Marjorie has joined the HR department of Thomas Johnson Inc. as an intern. The organization plans on giving all newly hired site engineers copies of their job descriptions to help them understand what the organization expects of them. Marjorie has been given the task of conducting job analyses and creating job descriptions for the site engineers. Which of the following should Marjorie consider while creating the job descriptions
Answer:
Job descriptions contain detailed specifications of the tasks involved in carrying out each duty.
E) All of the above options should Marjorie consider while creating the job descriptions for the site engineers.
Marjorie should consider all of these factors while creating the job descriptions for the site engineers.
While creating job descriptions, Marjorie should consider the following steps:
Conduct interviews or distribute surveys to collect information from current site engineers, their peers, and supervisors to gain a deep understanding of the job roles.Determine the necessary skills, knowledge, and abilities (KSAs) required for the job by analyzing the data collected.Utilize both task-oriented and worker-oriented approaches to job analysis. The task-oriented approach involves listing detailed tasks, whereas the worker-oriented approach focuses on the characteristics required of the worker.Prepare clear and detailed job descriptions that outline the expectations, responsibilities, and qualifications needed for the role.By following these steps, Marjorie will be able to create effective job descriptions that help newly hired site engineers understand their roles and what is expected of them.
Full question
Which of the following should Marjorie consider while creating the job descriptions for the site engineers?
A) Duties and responsibilities specific to the role
B) Qualifications and skills required for the position
C) Reporting structure and hierarchy within the organization
D) Performance evaluation criteria and metrics for success
E) All of the above
Amanda goes to the toy store to buy 1 ball and 3 different board games. If the toy store is stocked with 3 types of balls and 6 types of board games, how many different selections of the 4 items can Amanda make?
Answer:
E) 60
Explanation:
total possible combinations for the board games = N! / K!(N-K)!
N = total number of items K = size of the subgroup6! / [3! x (6-3)! ]
6! = 6 x 5 x 4 x 3 x 2 x 1 = 720
3! = 3 x 2 x 1 = 6
6! / [3! x (6-3)! ] = 720 / (6 x 6) = 720 / 36 = 20
total possible combinations for the ball = 3! / 1!2! = 6 / 2 = 3
total combinations for both 1 ball and 3 games = 20 x 3 = 60
An increase in the amount of physical capital per worker _____, while technological progress _____. makes the aggregate production function steeper; makes the aggregate production function flatter shifts up the aggregate production function; moves the economy along the aggregate production function moves the economy along the aggregate production function; shifts up the aggregate production function makes the aggregate production function steeper; changes the slope of the aggregate production function
Answer:
shifts up the aggregate production function; moves the economy along the aggregate production function
Explanation:
An increase in the amount of physical capital per worker shifts up the aggregate production function, while technological progress moves the economy along the aggregate production function.
In the case of an increase in the amount of physical capital per worker, what is implied is that at the same number of labor, output increases; this will shift the aggregate production function outwards.
However in the case of technology, the scenario does not say that technology is remaining at the same level but is progressing for output to increase, hence the movement will not be a shift in the curve but a movement along the curve.
Answer:
An increase in the amount of physical capital per worker MOVES THE ECONOMY ALONG THE AGGREGATE PRODUCTION FUNCTION, while technological progress SHIFTS UP THE AGGREGATE PRODUCTION FUNCTION.
Explanation:
As physical capital per worker increases, efficiency and productivity increases. Physical capital per worker represents the stock of equipment, tools and machinery per worker, e.g. a delivery man distributes 10 packages a day using a bicycle, but if he is given a delivery truck, he will be able to deliver 30 packages per day.
Technological progress result in a rightward shift of the aggregate supply curve. Technological progress increases productivity in a major way, e.g. computers and the internet have changed the way we work and live. New machineries are usually more efficient and are capable of producing more products at lower costs and with lower wastes and residual byproducts. Automated factories are able to work 24/7 at very low costs per unit of output.
When one party breaches a contract, the other party can choose from one or more of several_____________ . Generally, a court will grant money, a remedy at___________ , unless money is not sufficient. If that is the case, the court will grant a remedy in____________ .
Answer:
The correct answer to fill in the spaces is: remedies, law, equity
Explanation:
The effects of the breach constitute objectified mechanisms of protection of the interest of the creditor, whose functionality fundamentally depends on the fact of the breach of the contract. These mechanisms are called remedies and correspond to the rights or actions available to the creditor in case of default for the realization of their interest. In the Common Law, the term general remedies is defined as those means by which a right is executed or its violation is avoided, compensated or compensated. And, in particular, remedies for noncompliance are those rights or powers conferred by law or contract to the party affected by the breach, the exercise of which depends on the breach of the other contracting party and the concurrence of its specific factual assumption.
On January 1, 2020, Danvers Company purchased a copy machine. The machine cost $800,000, its estimated useful life is 5 years, and its expected salvage value is $50,000. What is the depreciation expense for 2021 using the double-declining-balance method
Answer:
The answer is $192,000
Explanation:
Double-declining-balance method is doubling the rate used.
To find the rate:
100percent÷5years
= 20%.
Doubling the rate:
20% x 2
=40%
Depreciation for December 31, 2020 is:
0.4 x $800,000
=$320,000.
Net book value of the asset at the beginning of January 1, 2021 is:
$800,000 - $320,000
$480,000.
Therefore, depreciation for December 31, 2021 is:
$480,000 x 0.4
=$192,000.
Therefore depreciation for December 31, 2021 is $192,000
The depreciation expense for 2021 using the double-declining-balance method is $300,000.
Explanation:The double-declining-balance method is an accelerated depreciation method commonly used for tax purposes. To calculate the depreciation expense for 2021 using this method, follow these steps:
Determine the machine's depreciable cost, which is the original cost minus the salvage value: $800,000 - $50,000 = $750,000.Calculate the annual depreciation rate: 100% / useful life = 100% / 5 years = 20%.Apply the double-declining-balance rate, which is twice the annual depreciation rate: 2 × 20% = 40%.Calculate the depreciation expense for 2021: Depreciable cost × double-declining-balance rate = $750,000 × 40% = $300,000.The depreciation expense for 2021 using the double-declining-balance method is $300,000.
Accountants at Idle Time Gaming, Inc. work with state-of-the-art systems that create financial statements every day, but the interpretation and analysis of those statements can take several hours. The accounting department consists of financial, managerial, and tax accountants. One advantage of departmentalizing the accountants is:____________
A. for efficiency, the employees can coordinate work within the function.
B. for efficiency, their isolation helps them to become focused, narrow specialists.
C. for effectiveness, the camaraderie that emerges promotes "group think," which is always good for the business.
D. for effectiveness, specialized professionals should always be grouped together. It speeds up project completion.
Answer:
One important advantage of the departmentalization of any functional area in any business organisation is that the specialized employees in the specific department can coordinate and work together in any particular project or function within the department.This can remarkably enhance work quality and improve employee performance in the organisation.Hence,the correct answer is option A. in this case.Explanation:
Departmentalization of organisational departments essentially leads to specialization of organisational functions and activities.Such specialization should be supported and facilitated by proper coordination and teamwork of the respective employees.This can essentially lead to a better professional concentration and expert involvement which not only enhances the quality of departmental projects or activities but guarantees smooth and timely completion of the group projects within the respective departments.In this case,if the concerned financial,managerial and tax accountants can be grouped together according to their respective areas of specialization,it would lead to a better professional communication among the experts and develop a cooperative work environment.This is a crucial precondition for developing and maintaining a smooth and effective work coordination and flow within the respective employees in any business organisation.
n the economy of Talikastan in 2015, consumption was $700, exports were $200, government purchases were $300, imports were $150, and investment was $400. What was Talikastan’s GDP in 2015? a. $1350 b. $1450
Answer:
b. $1450
Explanation:
The formula to calculate GDP is:
GDP = C + I + G + NX (X-M)
Where:
C = consumptionI = InvestmentG = government purchasesNX = Net Exports (Exports - Imports)X = ExportsM = ImportsNow, we plug the amounts into the formula:
GPD = 700 + 400 + 300 + 50 (200 - 150)
= 1,450
The crowding-out effect implies that restrictive fiscal policy will increase aggregate demand and employment. lead to a significant increase in the natural rate of unemployment. be highly effective against inflation. reduce real interest rates.
The crowding-out effect implies that restrictive fiscal policy will reduce real interest rates.
Option: D
Explanation:
The crowding out effect is the circumstances where greater interest rates consequences gives output of a decline in private investment expenditure so as to dampen the initial rise in overall investment expenditure. Authorities often embraces a restrictive fiscal-policy approach and raises spending to stimulate economic activity. This contributes to interest-rate rises. Higher interest rates have a impact on private investment choices. A high magnitude of the crowding-out impact can also result in lower economic revenue.
there is a high likelihood of such partnerships reducing competitive pressures on ALL industry members, provided technological change in the suppliers' business is rapid and the item being supplied is a commodity.
The factors a company should consider when determining an industry offers good prospects for attractive profits are growth potential as per the competition appears destined to become stronger or weaker.
Explanation:
The technique for revealing the different market or competitive position that rival firms occupy in the industry are having similar market positions.
The market positions that occupy in an industry and for identifying each rival's competitors are displayed using a visual technique.
The firm will not be a competitive in its industry without understanding the industry's key success factors. Key success factors are functions of both customer needs and competitive pressures.
David manages a Shoney's restaurant. He is considering staying open later in the evening. For David, the variable costs associated with staying open longer hours will include all of the following except
Answer:
Rent of the building will remain the same
Explanation:
The fixed costs will not change because fixed cost remains fixed for any level of activity whereas the variable cost changes with the increase in level of activity. As the activity level will change with additional hours work which will increase the variable costs only. So all variable costs will increase whereas fixed will remain fixed. The all the other options were variable costs except rent which is fixed cost. So rent will no change because of additional hours worked.
The Federal Reserve is:__________A) a primary purchaser of Treasury securities and an active participant in the secondary market for these issuesB) a primary purchaser of Treasury securities but not an active participant in the secondary market for these issuesC) not a primary purchaser of Treasury securities but an active participant in the secondary market for these securitiesD) not a primary purchaser of Treasury securities and not an active participant in the secondary market for these securities
Answer: C
Explanation:
The Federal Reserve Board is not a primary buyer of Treasury securities but is an active participant in the secondary market for Treasury securities. The Federal Reserve Board is not a main purchaser of Treasury securities as it does not bid at the Treasury auction weekly where only primary dealers are entitled to bid. However, the Federal Reserve Board trades with them in the secondary market in order to influence the availability of credit.
The International Trade Administration provides Multiple Choice
1. aid to underdeveloped countries and has limited protection in support of "essential" projects in approved countries and for approved products.
2. credit insurance that minimizes nonpayment risk caused by financial, economic, or political uncertainties.
3. a means to helping U.S. business compete in the global marketplace.
4. underwriting of trade and investments for U.S. firms.
5. risk insurance for companies investing in less-developed countries.
International Trade Administration provides a means to help US business compete in the global marketplace.
Explanation:
International Trade Association constitutes an agency under the US Dept of Commerce and was formed in 1980. It is tasked with promoting export of non-Agri services and goods to the outside market.
Other objectives of ITA include providing information to Americans to help them select markets, ensuring them access to international markets and protecting them from unfair competition from dumping and cheap imports.
ITA as a bureaucratic organisation consists of 3 sub-units. These include Industry & Analysis, Enforcement & Compliance and Global Markets
Patagonia managers look for employees who actively participate in the sport they design products for (i.e. a surfboard shaper has to love to surf). Requiring this passion and experience is part of the
Patagonia managers look for employees who actively participate in the sport they design products for as part of their hiring strategy.
Explanation:In this case, the subject of the question is Business.
Patagonia managers look for employees who actively participate in the sport they design products for because it is part of their hiring strategy to ensure that the employees have a deep understanding and passion for the sport. By hiring individuals with a personal connection to the sport, Patagonia can create products that meet the needs and preferences of their target customers. For example, a surfboard shaper who loves to surf will have insider knowledge of what makes a great surfboard, which can lead to the creation of high-quality products.
This practice helps Patagonia maintain a competitive edge in the market by offering products that are not only functional but also resonate with the target audience, resulting in higher customer satisfaction and loyalty.
Chad is willing to pay $5.00 to get his first cup of morning latté; he is willing to pay $4.50 for a second cup. He buys his first cup from a vendor selling latté for $3.75 per cup. He returns to that vendor later in the morning to find that the vendor has increased her price to $3.90 per cup. Chad buys a second cup. Which of the following statements is correct? a. Chad’s consumer surplus on his second cup of latté was larger than his consumer surplus on his first cup of latté. b. Chad places a higher value on his second cup of latté than on his first cup of latté. c. Chad’s willingness to pay for his second cup of latté was smaller than his willingness to pay for his first cup of latté. d. Chad is irrational in that he is willing to pay a different price for his second cup of latté than what he is willing to pay for his first cup of latté.
Answer:
C. Chad's willingness to pay for his second cup of latte was smaller than his willingness to pay for his first cup of latte.
Explanation:
Consumer surplus refers to the excess of price a consumer is willing to pay for a good over the price he actually ends up paying.
In the given case, Chad was willing to pay $5 for his first cup of latte. He bought the first cup for $3.75.
Thus, his consumer surplus for the first cup he purchased = $5 - $3.75
= $1.25
Similarly, his consumer surplus for the second cup of latte he purchased being, = $4.5 - $3.90
= $0.6
As can be seen, his consumer surplus has fallen in case of the second cup and also by the concept of diminishing marginal utility by which utility derived after each successive unit of consumption falls, Chad was willing to pay lesser i.e $4.5 instead of $5 for the second cup of latte.
Hence, Chad's willingness to pay for his second cup of latte was smaller than his willingness to pay for his first cup.
Brenda is the CEO of a large corporation. While presenting a proposal to a commercial bank for a corporate loan, she offered the bank's commercial loan manager a $10,000 "gift" for favorable treatment. Is Brenda guilty of bribery?
A. Brenda is guilty of bribery because she is dealing with a commercial bank in the normal course of business.
B. Brenda is guilty of bribery whether the manager accepts or not because the offer constitutes the crime.
C. Brenda is not guilty of bribery.
D. Brenda is guilty of bribery only if the manager accepts because the crime has not occurred without acceptance by the other party.
Answer:
C) Brenda is not guilty of bribery.
Explanation:
Bribery can be defined as offering a payment (or paying) to a government official in exchange for a favorable treatment either regarding a personal or commercial issue. In this case, Brenda offered money to a person working in a private company, so she cannot be guilty of bribery.
Bribery is referred to as the illegal offering or receiving the value as the source to influence or manipulate the person to perform the illegal task or the crime. The offerer in this case gets criminally charged.
The correct option is C) Brenda is not guilty of bribery.
Option C) Brenda is not guilty of bribery is correct because bribery can be defined as offering a payment (or paying) to a government official in exchange for a favorable treatment either regarding a personal or commercial issue.
In this case, Brenda offered money to a person working in a private company, so she cannot be guilty of bribery.
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A pension fund manager is considering three mutual funds. the first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a t-bill money market fund that yields a rate of 6%. the probability distribution of the risky funds is as follows: expected return standard deviation stock fund (s) 21 % 28 % bond fund (b) 12 18 the correlation between the fund returns is 0.09. you require that your portfolio yield an expected return of 13%, and that it be efficient, on the best feasible cal.
a. what is the standard deviation of your portfolio? (round your answer to 2 decimal places.)
b. what is the proportion invested in the t-bill fund and each of the two risky funds? (round your answers to 2 decimal places.
Answer:
Standard deviation= 17.78
Proportion invested in Tbills= 0.65
Proportion of stocks in complete portfolio=0.346
Proportion of bonds in complete portfolio=0.303
Explanation:
Riverbend Inc. received a $250,000 dividend from stock it held in Hobble Corporation. Riverbend's taxable income is $2,460,000 before deducting the dividends received deduction (DRD), a $68,500 NOL carryover, and a $172,000 charitable contribution. Use Exhibit 16-6. (Round your tax rates to 1 decimal place. Leave no answer blank. Enter zero if applicable.)
a. What is Riverbend’s deductible DRD assuming it owns 10 percent of Hobble Corporation?
b. Assuming the facts in part (a), what is Riverbend’s effective tax rate on the dividend?
c. What is Riverbend’s DRD assuming it owns 51 percent of Hobble Corporation?
d. Assuming the facts in part (c), what is Riverbend’s marginal tax rate on the dividend?
e. What is Riverbend’s DRD assuming it owns 87 percent of Hobble Corporation (and is part of the same affiliated group)?
f. Assuming the facts in part (e), what is Riverbend’s marginal tax rate on the dividend?
Answer:
a. What is Riverbend’s deductible DRD assuming it owns 10 percent of Hobble Corporation?
$250,000 x 70% = $175,000b. Assuming the facts in part (a), what is Riverbend’s effective tax rate on the dividend?
$15,750 / $250,000 = 6.3%current corporate tax rate = 21%, ($250,000 - $175,000) x 21% = $15,750
c. What is Riverbend’s DRD assuming it owns 51 percent of Hobble Corporation?
$250,000 x 80% = $200,000d. Assuming the facts in part (c), what is Riverbend’s marginal tax rate on the dividend?
21%e. What is Riverbend’s DRD assuming it owns 87 percent of Hobble Corporation (and is part of the same affiliated group)?
$250,000f. Assuming the facts in part (e), what is Riverbend’s marginal tax rate on the dividend?
0%Explanation:
the dividends received deduction:
less than 20% stake, 70% deductionstake between 20-80%, 80% deductionmore than 80% stake, 100% deductionRiverbend Inc.'s deductible Dividends Received Deduction (DRD) varies depending on their percentage of ownership in Hobble Corporation. It ranges from 50% to 100% of the dividends. The effective tax rate on the dividends and the marginal tax rate also change accordingly, with a maximum permissible deduction effectively making the marginal tax rate 0%.
Explanation:This question relates to corporate tax and the dividends received deduction (DRD). The DRD is a tax deduction which corporations can apply, depending on the percentage of ownership they have in the corporation from which they received dividends.
a. The deductible DRD for Riverbend Inc., owning 10 percent of Hobble Corporation, is 50% of the $250,000 dividends, which equals to $125,000.
b. The effective tax rate on dividends for Riverbend Inc., under the above conditions, is determined by the rate at which the company is taxed after considering the DRD. Specifically, it is the remaining 50% of the dividends that would be included in the taxable income.
c. If Riverbend Inc. owns 51 percent of Hobble Corporation, the deductible DRD then increases to 65% of the received dividends which results in a deductible of $162,500.
d. The marginal tax rate depends on the company's income tax bracket and varies based on the amount of taxable income.
e. If Riverbend Inc. owns 87 percent and is part of the same affiliated group, then they could potentially deduct 100% of the dividends received, $250,000, based on current tax regulations.
f. As per the previous point, given 100% of the dividends can be deducted, the marginal tax rate on the dividend in such a case becomes 0%.
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