Answer:
The right solution is "Not Deductible".
Explanation:
If everyone's investigation for a company or starting a company fails, costs classified into two broad categories besides you:
- Unless you're a person and your effort to start a company isn't successful, there are 2 kinds of investments you have had in attempting to develop yourself in the company.
- The expenses clients used to have before you made an intention to open a particular business. These would be personal but non-deductible charges. They include other expenses incurred throughout a regular search for something like a company or equity investment opportunity or perhaps a thorough investigation into it.
- The expenditures you have in your effort to purchase or launch a particular venture. Such charges are capital expenditures, and that as a capital loss, you will subtract them.
Answer:
a. What amount of taxable dividend income, if any, does Madison recognize in 2009?
Madison doesn't have to recognize any income because she is not getting any. Only after Madison decides to sell his stocks will he recognize any taxable income if she makes a gain.
b. What is Madison's income tax basis in her new and existing stock in Badger Corporation, assuming the distribution is non-taxable?
Madison current basis is $100 per stock, and after the stock dividend it will be $100 / 1.1 = $90.91 per stock
c. How would you answer questions a and b if Madison was offered the choice between 1 share of stock in Badger for each 10 shares she owned or $100 cash for each 10 shares she owned in Badger?
then the cash dividend would be $10 per stock, which results in $10 x 1,000 = $10,000 taxable income. Her basis in the stock will remain not change.
Answer:
16.7 percentage
Explanation:
bond price = $1000 - $100 = $900
fixed amount / bond price * 100 = IR
(150/900) * 100 = 16.7%
The reason for this equation is that interest rate is the amount a lender charges for the use of assets expressed as a percentage of the principal.
originally the price if the bond is $1000 which later falls by $100, so that leaves us to a $900 bond rate.
The interest rate is typically noted on a annual basis known as the annual percentage rate (APR).
Answer:
1. 300 tires
2. 150 units
3. 32 times
4. 11.4 days
5. $2,400
6. $2,400
Explanation:
Economic order quantity is the quantity at which business incur minimum cost. This is the level of order where the holding cost equals to the ordering cost of the business.
Material cost remains the same whatever the the order level. The costs that vary with the change in order level are ordering cost and holding cost.
The cost incurred to for each order placed is called ordering cost and cost which incurred to hold the inventory for a specific period is called holding cost.
EOQ = 
EOQ = 
EOQ = 300 units
1. EOQ is the level of order That should be placed to minimize the total cost of the business. The manager should order 300 tires in each lot.
2.
Average Inventory = EOQ / 2 = 300 / 2 = 150 units
3.
Number of orders = Total yearly demand / EOQ = 9,600 / 300 = 32 times
4.
Number of days = ( EOQ / total demand ) x 365 = 300 / 9600 x 365 = 11.4 days
5.
Fixed ordering cost = Total Demand / EOQ x $75 = (9600 / 300) x $75 = $2,400
6.
Holding cost = Average Inventory x holding cost per unit = 150 units x $16 = $2,400
Here Holding cost and ordering cost is same at EOQ level.
Answer:
I would purchase the share as he actual value is more than its current market price
Explanation:
expected dividend in perpetuity =present dividend *growth rate
present dividend is $5.25
growth rate is 8.5%
expected dividend =$5.25*(1+8.5%)
expected dividend=$5.70
in determining the actual value of the stock we the stock price formula below:
price=expected dividend/(expected return-growth rate)
price=$5.70/(15.5%-8.5%)
price=$81.43
In actual terms the stock should be selling for $81.43, hence a buy decision at $78.50 would be a welcoming as the stock is selling beyond its real worth.
