In this example, Owen will be the only owner and since he wants to have employees under this business form he is allowed to hire employees whereas if he was thinking of an S- Corporation he could not have any employees. Some other benefits of sole proprietorship: * Filing taxes involves a simple self-employment income tax form since all the profits and losses are pass on to the owner or sole proprietor * No high or any fees or registration requirements- since Owen is investing all his personal savings on this new business not having start-up fees is beneficial. * No payroll set-up * Net earnings of the business are not subject to corporate income taxes but are taxed only as personal income. Some of the disadvantages of sole proprietorship are: * The proprietor is subject to unlimited personal liability for the debts of the business. If Owen fails to pay his business debts, creditors will come
Question 1: Score 0/1 Your response Correct response P16-37 Find Missing Data for Profit Variance Analysis (L. O.4) Find the values of the missing items. Assume that the actual sales volume equals actual production volume. (There are no inventory level changes.) (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).
This statement is true for: 29 What method of inventory valuation should be used for economic decision-making problems? 30 ____ are defined as costs which are incurred regardless of the alternative action chosen in a decision-making problem. 31 If TC = 321 + 55Q - 5Q2, then average total cost at Q = 10 is: 32 According to the theory of cost, specialization in the use of variable resources in the short-run results initially in: MIDTERM QUIZ 2 The different methods by which the sellers inform their potential buyers about the product is called: knowledge
Page 484 has formulas!! 6. When the firms maintains a target leverage ratio, we compute its levered value V^L as the present value of its free cash flows using the WACC, whereas its unlevered value V^U is the present value of its free cash flows using its unlevered cost of capital or pretax WACC. 15.3 Recapitalizing to Capture the Tax Shield 1. when securities are fairly priced, the original shareholders of a firm capture the full benefit of the interest tax shield from an increase in leverage 15.4 Personal
AIFS Case FIN 411 April 1, 2013 1.) If AIFS decided to choose a 100% forward hedge, the actual costs in dollars will not change based on the changes in the exchange rate. The cash flows from the forward hedge in Euros are always equal to the underlying expenses in Euros. Furthermore, the actual costs in dollars are equal to the cash flows from shorting dollars. The forward hedge has zero impact when the exchange rate remains the same, so the actual costs in dollars would be exactly the same when using no hedge at all.
Running head: Business Law Rachel Lavender Western Governors University 2/21/11 PART A Sole Proprietorship A sole proprietorship is how most business entities begin. This type of business is owned and operated by one person. The main advantage of this type of business is that the owner does not need to get the approval of a partner or board in order to make decisions. A significant disadvantage is that, in a sole proprietorship, there is no separation from the business and personal assets, therefore, there is unlimited personal liability to the owner’s personal assets. · Liability-There is no difference between personal and business assets.
WHAT IS CLEAN SURPLUS? Clean Surplus is a little known accounting method designed to provide predictability for the investor. It is an extremely accurate method that allows us to compare the operating efficiency of each and every company in the exact same manner. The traditional accounting statements do not develop the book value (Owners’ Equity) in the same manner for any two companies. Clean Surplus does indeed allow the exact, identical development of book value (Owners’ Equity) for each and every company.
Profit Retention: Because the business and owner are autonomous, the sole proprietor has full ownership of the business’s finances. All profits belong to the owner, who can choose to do with them as they see fit. Location: In a sole proprietorship, the owner reserves the right to change location at will. The owner will need to continue to comply with all city and state registration requirements and tax obligations. Convenience or Burden: While it is quite simple to establish a sole proprietorship business, it can be difficult to raise capital.
It assumes average variable costs are constant per unit of output, at least in the range of likely quantities of sales. (i.e., linearity). It assumes that the quantity of goods produced is equal to the quantity of goods sold (i.e., there is no change in the quantity of goods held in inventory at the beginning of the period and the quantity of goods held in inventory at the end of the period). In multi-product companies, it assumes that the relative proportions of each product sold and produced are constant (i.e., the sales mix is
GOTHENBURG STUDIES IN FINANCIAL ECONOMICS 971214 VALUE BASED MANAGEMENT: Economic Value Added or Cash Value Added? by Fredrik Weissenrieder Department of Economics Gothenburg University and Consultant within Value Based Management Anelda AB V. Hamngatan 20 S-411 17 Göteborg Sweden STUDY NO 1997:3 VALUE BASED MANAGEMENT: Economic Value Added or Cash Value Added? by Fredrik Weissenrieder VALUE BASED MANAGEMENT: Economic Value Added or Cash Value Added? by Fredrik Weissenrieder Table of Content: 1 Introduction 2 Value Based Management 3 CVA and the concept of Strategic Investments 4 EVA 4.1 EVA's corrections - Do they work in practice? 4.1.1 Not enough adjustments are carried out 4.1.2 Irrelevant issues are discussed 5 EVA instead of Cash Flow?