of debt. 6. From a purely economic viewpoint‚ a firm should not ration capital. The firm should be able to find additional funds and increase its overall profitability and wealth through accepting investments to the point where marginal return equals marginal cost. II. Multiple Choice 18-1 Chapter 18 1. 2. 3. 4. 5. D D B A A Long-term Financing Decisions 6. C 7. B 8. B III. Problems
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implemented. The principle UK taxes will be explained clarifying the fundamental aspects of tax law. Task B analysis the UK tax system by contrasting it with USA‘s tax system to identify how a company is affected and operated within different tax structures. The UK tax system is constituted of various different taxes‚ they are categorised as direct taxes or indirect taxes. Direct taxes are charged on profits‚ income
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Adam Smith in his book‚ Wealth of Nations (Smith 1776: 414)‚ outlined that high taxes‚ sometimes by diminishing the consumption of the taxed commodities‚ and sometimes by encouraging smuggling‚ frequently afford a smaller revenue than what might be drawn from more moderate taxes. The Laffer curve assumes the existence of two points where state tax revenues amount for zero. At these two points‚ the Aggregate Average Tax (AAT) amounts either for 0% (t=0) or 100% (t=1). At a certain point in between
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annual costs of new product cash expenses depreciation expenses Income before taxes Income tax at marginal rate Net income Net annual cash flow for years shown 3‚170‚000 2‚400‚000 380‚000 390‚000 124‚800 265‚200 645‚200 2 Year two Net Cash Flow with NO depreciation Expected annual sales of new product Expected annual costs of new product cash expenses depreciation expenses Income before taxes Income tax at marginal rate Net income Net annual cash flow for years shown 3‚170‚000 2‚400‚000 380
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affects of the cost of capital. Furthermore‚ it shows its connections to the shareholder’s wealth and how to calculate the cost of capital in a specific situation where the risk is depending from the case. THE VALUE OF THE FIRM GIVEN CORPORATE TAXES ONLY THE VALUE OF THE LEVERED FIRM According to the theory of cost od capital‚ corporate valuation and capital structure of Modgliani and Miller there is either implicity or explicity assumed for the folowing expressions: Capital markets
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of $50‚000‚ (2) dividends received of $15‚000‚ (3) dividends paid of $25‚000‚ and (4) income taxes. What are the firm’s in- come tax liability and its after-tax income? What are the company’s marginal and average tax rates on taxable income? Taxable operating income $ 365‚000 Taxable interest ($ 50‚000) Taxable dividend received$ 4‚500 15000*(1 - 0.70) Total taxable income$ 319‚500 a. The marginal rate for this company is 39% The non-taxable dividends are: $15‚000 * 0.7 = $ 10‚500 Tax Liability
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3 4 8 8 9 10 13 19 Tables 1. Projected Deficits Under CBO’s March 2012 Baseline and CBO’s Estimate of the President’s Budget With and Without Macroeconomic Effects 2. CBO’s Estimates of Effective Federal Marginal Tax Rates on Capital Income 3. CBO’s Estimates of Effective Federal Marginal Tax Rates on Labor Income 4. CBO’s Estimates of How the President’s Budget Would Affect Inflation-Adjusted Gross National Product 5. Difference in Projected Deficits Under CBO’s March 2012 Baseline and CBO’s
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country‚ many different types of taxes are imposed on people and businesses. But due to recent economic downturns‚ some doubt the tax code and want reform. While there may be some benefits to a change‚ altering our tax system would end up creating many more problems than it would fix‚ hurting the nation’s economy and its growth. The country’s basic tax policy is comprised of income taxes‚ corporate taxes‚ payroll taxes‚ transfer taxes‚ and excise taxes. Income tax is the percentage citizens
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inquiries generated by newspaper ads would have to increase from 3‚000 to 4‚000. P7.7 Marginal Revenue Product of Labor. To better serve customers interested in buying cars over the Internet‚ Smart Motors‚ Inc.‚ hired Nora Jones to respond to customer inquiries‚ offer price quotes‚ and write orders for leads generated by the company’s Web site. During last year‚ Jones averaged 1.5 vehicle sales per week. On average‚ these vehicles sold for a retail price of $25‚000 and brought the dealership a profit
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Questions in macroeconomics Instructor: MA. Bui Huy Khoi Chapter 1 What is economics? Top of Form [pic] Question 1 Resources in an economy: a) Are always fixed b) Can never decrease c) Always increase over time d) Are limited at any moment in time [pic] Question 2 Human wants are: a) Always fixed ) Limited c) Unlimited d) Likely to decrease over time [pic] Question 3 The sacrifice involved when you choose
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