Net operating losses cannot be used to shelter personal income but can be carried forward by a C corporation to provide tax benefit in future when the business expects profit. Apparently, Mr. Jones is already in the top tax bracket. S-Corporation income tends to support start-up businesses and taxpayers with little income, because the corporation is taxed at the individual's lower personal income tax rate. The initial
It paints a bad picture because the business may collect zero revenues for a month and pay accounts payable during that month showing a loss of revenue while the next month they may pay zero accounts payable but receive two month’s worth of accounts payable, this would indicate that the company had higher than realistic earnings. Accrual basis accounting paints a better picture of how a company profits or losses over a indicated time period, but fails to state clearly the cash on hand. E3-2B (b) Why would politicians prefer the cash basis over the accrual basis? The Government prefers to use the cash basis over the accrual basis for many reasons but none more the how to account for public unions workers’ pensions. The Government does not want to report their pensions while the employee is working because politicians believe that benefits
Also Sears and Wal-Mart may not want to for fear of losing the current core customers they already have established. Wal-Mart nor Sears has yet to compete with their other competitors. In fact, it will cost them more money to compete with any of the other big name distributors and they would have to raise their prices. Wal-Mart and Sears are known for their low and reasonable prices. According to Jeffrey Immelt he says that his environmental agenda is "not about being trendy or moral.
Q1) Cohen calculated the WACC to be 8.4%, which we don’t agree. The reasons are as follows: Single/Multiple cost of capital: We think a single cost of capital is sufficient because divisions of Nike have similar risk profiles. Weights: We don’t agree with Cohen’s calculation of book value weights. The weights should be calculated with market value of debt and equity because cost of capital shows how much the investors are willing to pay at present, i.e. at market value.
This estimate also is conservative because the cost of new equipment was not included in total assets. Assumed WACC Assumed tax rate 15% 35% Assumed total assets (no change) Assumed current liabilities Capital charge (.15 x $4,000,000) EVA (given) $ 4,000,000 0 600,000 (120,000) Actual 480,000 Required Operating income after tax, $600,000 – 120,000,
Task 8 part 1 |Ratio |Calculation |Answer for 2009 |Explain how this can this ratio be used to monitor performance | |Current ratio |Current assets/current |6178/1391=0.44:1 |This ratio shows that they are not in a strong position to pay long term debut because they have | | |liabilities | |got less current assets than current liabilities. Tesco can’t pay short term debut which means it | | | | |has weak liquidity. In order to pay of the short debut they would have to have an increase in | | | | |sales or they would have to take out an additional loan, this would be accessible because the bank| | | | |knows that Tesco is a big store and can afford to pay people back. | |Acid Test |(Current assets – stock)/ |6178-2669=3509/1391=0.25:1 |This shows the ability to pay short term debut without selling stock first. The ideal answer for | | |current liabilities | |this ratio is 1:1, Tesco is way under this ideal ratio which means they’re in a poor position to | | | | |pay short term debuts because they have four times as many debuts than they have current assets.
However, even with this change in values, the company is still under its breakeven point. The new breakeven point, with a 10% decrease in average prices and an increase in units sold to 14000, would be equal to 14,945 units and $10,297,105. 3) Gretchen’s idea to eliminate sales commissions, morally, may not be the correct decision because it works in a way to motivate the sales people. Without this commission, in the
There are probably many companies out there that do not care about integrity ethics and only focus on making money, but investors should be aware that if they chose this money making company they risk much more than money. Discussion Question Suggestion Do you feel a company can have poor integrity and still maintain good ethical standards regardless of whether they follow the SOX laws or not? Reference Hazels, B. (2010, Nov/Dec). Eight Years After The Fact Is SOX Working?
Not in monetary handouts, but in a manner in which to have a lasting advantage. Also Carnegie believes that taxation will provide an example to those wealthy men who have not done their duty. Also the inheritance taxation will provide more money for society to do what is right; to help improve the society as a whole. Overall I agree with Carnegie. Yet, I only believe the super wealthy should be subject to higher inheritance taxes than normal.
However, choosing option one has particular strong suits. It would save Rosewood hotels from having to invest 1 million dollars per year into a corporate branding strategy, as well as, not having to persuade hotel managers/co-op owners of why the branding must be done. On the other hand, John has identified that the Rosewood brand has low recognition and brand-wide usage from their guests; a direct result of the soft branding strategy. In addition, it is noted in the case that competition within the luxury hotel segment is intense which is beginning to make it difficult to position the Rosewood hotels. Ultimately, if Rosewood continues their soft branding strategy they will begin to diminish within the luxury hotel industry.