The author of this article, Jeannine Aversa, is stating that key economic indicators point to the likelihood of a recession. Aversa supports her thoughts by noting the real GDP; “crawled at a 1.3 percent pace in the opening quarter of 2007…even weaker than the sluggish 2.5 percent rate in the closing quarter of last year.” The author suggests the main cause of the economic slowdown is due to “the housing slump.” Consumer expenditures are driving the economy, but Aversa worries about a “fallout from risky mortgages and rising energy prices.” Uncertainty of the Feds actions concerning the interest rates is leading to lower investment spending. The author also states that the Feds decision on raising or lowering the interest is due to the
The parent receives annual dividends from the subsidiary of $2,500,000. If the parent's marginal tax rate is 34% and if the exclusion on intercompany dividends is 70%, what is the effective tax rate on the intercompany dividends, and how much net dividends are received? Question 20 New York Waste (NYW) is considering refunding a $50,000,000, annual payment, 14% coupon, 30-year bond issue that was issued 5 years ago. It has been amortizing $3 million of flotation costs on these bonds over their 30-year life. The company could sell a new issue of 25-year bonds at an annual interest rate of 11.67% in today's market.
It is good that the percentage decrease was lower than sales decrease. Gross Profit increased from year 6 to 7 by$447,000.00, or 37.5%. This is a strong move. Gross Profit decreased from year 7 to 8 by $266,600.00, or -16.3%. This is a sign of weakness.
Current macroeconomic issues 2.1 Steady growth GDP can be seen as “the total annual output of goods and services on which aggregate demand is spent” (Sloman, 2008, p.277); it can be calculated as the sum of consumer spending, investments, government spending and balance of import and export. 2.1.1 Current issue UK has a fluctuant GDP since 2009. There is both positive and negative growth in the recent years (Trading Economics, 2013). GDP of UK shrank by 0.3% at the end of 2012, which is mainly attributed to drop in mining and quarrying industry, after maintenance delays at North Sea oil field. Manufacturing is another sector that causes the negative growth in GDP; it has decreased by 1.5% than the year before.
In fiscal year 2008, the return on invested capital of continuing operations was 9.5% compared to fiscal year 2007’s 13.9%. The decrease reflects the decrease in operating profit that also impacts the rationalization charges. If the rationalization charges are excluded the return on invested capital for continuing operations would have been 11.4% (Phillips, Libby, Libby, 2011). The cash flow statement shows the movement of cash within a company. The cash flow statement is split into three categories: operating activities, investing activities, and financing activities.
Being that these types of assets are From significant parts of savings, this is a logical argument. 1982 to 1989, the Dow Jones Average went from 884 to 2,509 which drastically increased capital assets’ values. There was an impressive drop in the unemployment rate during Reagan’s administration as well. 17 million new jobs were created and the unemployment rate fell from 9.7% to 5.5% by the time Reagan’s presidential term ended (Niskanen & Moore 1996). The hours worked by working aged adults grew during
FIN 340 - Fall 2014 Practice Exam Name: 1) The order of line items included in the Statement of Retained Earnings is as follows: a) Beginning RE, Dividends, Ending RE, NI b) Beginning RE, Depreciation, NI, Ending RE c) Beginning RE, NI, Dividends, Ending RE d) Beginning RE, NI, Depreciation, Ending RE 2) Playboy Inc. stated that its sales were the same as last year’s, except the cost of goods sold dropped 30%. The net cash flow had declined for some reason. What could be a possible reason for this decrease in net cash flow? a) The company’s depreciation expense increased. b) The PP&E had increased from the purchase of a new less expensive printer.
According to the U.S. Census Bureau, median household income in the United States dropped 2.3% in 2010 after accounting for inflation. Overall, median household income in the United States has declined by a total of 6.8% once you account for inflation since December 2007. Should we be excited that our incomes are going down and that a record number of Americans slipped into poverty last year? Should we be thrilled that the economic pie is shrinking and that our debt levels are exploding? All of those that claimed that the U.S. economy was recovering and that everything were going to be just fine having some explaining to do.
Checkable deposits contract by $2,800, but $700 is converted into currency held by the public. The money supply contracts by $2,100. b. Checkable deposits contract by $14,000, but $700 is converted into currency held by the public. The money supply contracts by $13,300. c. Checkable deposits expand by $3,750, but currency in circulation falls by $750.
(2008). Economist. 389(8605), 87-88. Retrieved from http://www.ebscohost.com Hall, R. (2010). Why Does the Economy Fall to Pieces After A Financial Crisis?