EGT1 - Economics Subdomain: 309.1 - Task 1 A. Profit Maximization a1. The total revenue (TR) to total cost (TC) approach relies on the fact that profit equals revenue minus that cost and focuses on maximizing the greatest difference between TR and TC. Total Revenue (TR): Is the income derived from the sales of a given product. (McConnell., 2011) This total does not take include the cost of producing the product.
it represents the purchase price of a business that is about to be sold. D. it is the difference between the fair market value of the net tangible and identifiable intangible assets as compared with the purchase price of the acquired business. 42) Easton Company and Lofton Company were combined in a purchase transaction. Easton was able to acquire Lofton at a bargain price. The sum of the market or appraised values of identifiable assets acquired less the fair value of liabilities assumed exceeded the cost to Easton.
It would be my advice for Mr. Jones to not buy the stock because of the liability of current and future tax obligations which Mr. Jones would incur from the purchase of the stock. Since the tax identity of Smithon corporation would have not ceased, it is not a favorable purchase for Mr. Jones. Ina a case where the tax identity of a firm does not cease not to exist, the tax aspects will remain the same and so will the existing tax schedule. So in this case it would mean that Mr. Jones would not be allowed to change the financial year to end on December 31. The buyer in cases where he can’t change the legal entity is in a non -benefice situation, the buyer is limited to follow the current tax basis on the company’s assets even if the buyer paid more for the
Interest payments on the debt are deductible by the corporation while dividends are not deductible. Repayment of the principal is tax free to the creditor, whereas payments made to shareholders for their stock may be considered dividends or taxable redemptions. On the other hand, a corporation does not recognize a gain or loss on the receipt of money or other property in exchange for its stock. Also, it does not recognize income when it receives money or other property as a contribution to
If the marginal revenue is greater than marginal cost this would be when a profit maximizing firm would need to increase production until marginal revenue is equal to marginal cost. However, if the opposite situation exist were the firm finds that the marginal revenue
Which of the following situations would NOT be considered constructive receipt of income by a cash basis taxpayer? Your Answer: Cash surrender value of life insurance policy. The income is not available to the taxpayer without significant restrictions (e.g. surrendering the policy) so the doctrine of constructive receipt does not apply to the cash surrender value of a life insurance policy. ________________________________________ 3.
The detailed analysis used for this conclusion is presented in Exhibit 1 of this paper. The reasoning behind our diagnosis is given below. Barrier to Entry (High): The market for the HPL in Canada is about 100 Million dollars. Assuming a high net margin of 20%, the total profits of the industry will be about 20M. The investment for a new plant is 70 million dollars.
And as ruled in Donald and Denise Hastings v. Commissioner of Internal Revenue, since the gambling activities are limited to the weekends, they are excluded from consideration as a business activity. It is for these reasons that Dr. Green should not attempt to classify the expenses as a trade or business but instead should claim any winnings as
Therefore the third condition has not been met and the penalty payment would be included in the minimum lease payment. Since Big Bear’s lease agreement has failed condition three of ASC 840-10-25-14 c there is no need to continue to the next
If you choose 40 random employees from the corporation, the standard error would equal 6/Square root of 40 = .95 days. The 12 days in this department corresponds to (12-8.2)/.95 = 4 standard errors above the corporation average of 8.2. This is much higher than two or three standard errors, and it appears to be beyond chance variation. Chapter 9 Exercise 3 The p- value tells you how likely it would be to get results at least as extreme as this if there was no difference in the taste and only chance variation was operating. In this problem, p-value of 0.02 means that, if there is no difference in taste, then there is only 2% chance that 70% or more people would declare one drink better than the