Homework Answers
Q7. Option 3.
Q8. Option 3. Since the taxes are 12.5%,7.5% and 7%, as the percentage of income falls as income rises
Q9. Option 2. In fiscal years 1998 to 2001, the surplus was $69.2, $125.5, $236.2 and $128.2 billion respectively
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Costs. This is termed as O Interest-rate effect O the special-interest effect If a person is taxe...
Question 2 1 pts A tax on interest income: causes the gross interest rate paid by...
Question 2 1 pts A tax on interest income: causes the gross interest rate paid by investors to exceed the net interest rate received by savers. O will always reduce saving. will always increase saving. is equivalent to a lump-sum tax Question 3 1 pts A tax on interest income does not prevent credit market from efficiently allocating resources. True False Question 4 1 pts Currently, the tax treatment of capital gains in the United States is such that: all...
Please provide a clear path to how you got the answer, Thank you! Special Order Example...
Please provide a clear path to
how you got the answer, Thank you!
Special Order Example #2 Garston Company produces a single model wind turbine and has an annual plant capacity of 3,000 units. Data concerning this product are given below: 2,500 units $ Annual sales at regular selling prices Manufacturing costs: Variable manufacturing cost per unit Fixed (annual) Selling and administrative expenses: Variable (sales commissions) Fixed (annual) 2,000 750,000 150 55,000 The company has received a special order for...
Interest Liabilities Costs Assets Yield Rates Rate-sensitive 500 6.0% 600 2.0% Fixed-rate 350 9.0% 220 4.0%...
Interest Liabilities Costs Assets Yield Rates Rate-sensitive 500 6.0% 600 2.0% Fixed-rate 350 9.0% 220 4.0% Non-earning/Non-paying 150 0.0% 100 0.0% Total 920 Equity 80 Total 1,000 1,000 [i] Calculate the amount of interest income, interest expense, and net interest income generated by the balance sheet structure of Wales Bank. Report the bank's net interest margin.
Campbell, a single taxpayer, earns $316,000 in taxable income and $7,600 in interest from an investment...
Campbell, a single taxpayer, earns $316,000 in taxable income and $7,600 in interest from an investment in State of New York bonds. (Use the U.S. tax rate schedule). Required: a. If Campbell earns an additional $22,000 of taxable income, what is her marginal tax rate on this income? b. What is her marginal rate if, instead, she had $22,000 of additional deductions? (For all requirements, do not round intermediate calculations.) a. Marginal tax rate Marginal tax rate b. Hugh has...
If Congress increased the personal tax rate on interest, dividends, and capital gains but simultaneously reduced...
If Congress increased the personal tax rate on interest, dividends, and capital gains but simultaneously reduced the rate on corporate income, what effect would this have on the average company’s capital structure?
The Alabama State has a state income tax with the following components: the state income tax...
The Alabama State has a state income tax with the following components: the state income tax applies only to wages and salaries (not including interest and dividends) the state allows a standard deduction of $1,000 per person the state allows a tax credit equal to $150 per person the marginal tax rates are as shown below marginal tax rate taxable income 0 - $20,000 20,001 - 50.000 >50,000 4 6% 8% Assume that Billy Ray, a resident of Alabama, has...
ACME company manufactures 20,000 bass-o-matic blenders. The company incurs $12/unit of variable costs and $4/unit if...
ACME company manufactures 20,000 bass-o-matic blenders. The company incurs $12/unit of variable costs and $4/unit if fixed costs at this level if production and sells each for $35. A foreign wholesaler offers to purchase 3,000 blenders at $15 each. ACME would incur special shipping costs of $1 each if the order were accepted. ACME has the capacity to produce an additional 5,000 blenders. If the special order is accepted, what will be the effect on net income? A) $45,000 increase...
Interest Costs Assets Yield Rates Liabilities Rate-sensitive 500 600 Fixed-rate 350 220 Non-earning/Non-paying 150 100 Total...
Interest Costs Assets Yield Rates Liabilities Rate-sensitive 500 600 Fixed-rate 350 220 Non-earning/Non-paying 150 100 Total 920 Equity 80 [ii] The Monetary Policy Committee at the Bank of England has raised interest rates by 0.5%. To determine interest rate risk, use GAP analysis to show the effect of the rise in rates on the profitability of Wales Bank.
Markum Enterprises is considering permanently adding an additional $182 million of debt to its capital structure. Markum's corporate tax rate is 30%. a. Absent personal taxes, what is the value o...
Markum Enterprises is considering permanently adding an additional $182 million of debt to its capital structure. Markum's corporate tax rate is 30%. a. Absent personal taxes, what is the value of the interest tax shield from the new debt? b. If investors pay a tax rate o 40% on interest income, and a tax rate of 20% on income from dividends and capital gains, what is he value o the interest tax shield from the new debt? a. Absent personal...
According to the Fisher effect, an increase in the inflation rate would increase nominal interest ates"...
According to the Fisher effect, an increase in the inflation rate would increase nominal interest ates" O True O False QUESTION 33 Economists believe that the classical dichotomy separating real from nominal variables holds in the long-run. True False QUESTION 3 Assume the economy only produces basketballs. There is a money supply of $1000. The economy produces 50 basketballs that sell for $40 each. What is nominal GDP and money velocity? "Nominal GDP = $50, velocity = 0.5" "Nominal GDP...
Question 2 1 pts A tax on interest income: causes the gross interest rate paid by investors to exceed the net interest rate received by savers. O will always reduce saving. will always increase saving. is equivalent to a lump-sum tax Question 3 1 pts A tax on interest income does not prevent credit market from efficiently allocating resources. True False Question 4 1 pts Currently, the tax treatment of capital gains in the United States is such that: all...
Please provide a clear path to
how you got the answer, Thank you!
Special Order Example #2 Garston Company produces a single model wind turbine and has an annual plant capacity of 3,000 units. Data concerning this product are given below: 2,500 units $ Annual sales at regular selling prices Manufacturing costs: Variable manufacturing cost per unit Fixed (annual) Selling and administrative expenses: Variable (sales commissions) Fixed (annual) 2,000 750,000 150 55,000 The company has received a special order for...
Interest Liabilities Costs Assets Yield Rates Rate-sensitive 500 6.0% 600 2.0% Fixed-rate 350 9.0% 220 4.0% Non-earning/Non-paying 150 0.0% 100 0.0% Total 920 Equity 80 Total 1,000 1,000 [i] Calculate the amount of interest income, interest expense, and net interest income generated by the balance sheet structure of Wales Bank. Report the bank's net interest margin.
Campbell, a single taxpayer, earns $316,000 in taxable income and $7,600 in interest from an investment in State of New York bonds. (Use the U.S. tax rate schedule). Required: a. If Campbell earns an additional $22,000 of taxable income, what is her marginal tax rate on this income? b. What is her marginal rate if, instead, she had $22,000 of additional deductions? (For all requirements, do not round intermediate calculations.) a. Marginal tax rate Marginal tax rate b. Hugh has...
The Alabama State has a state income tax with the following components: the state income tax applies only to wages and salaries (not including interest and dividends) the state allows a standard deduction of $1,000 per person the state allows a tax credit equal to $150 per person the marginal tax rates are as shown below marginal tax rate taxable income 0 - $20,000 20,001 - 50.000 >50,000 4 6% 8% Assume that Billy Ray, a resident of Alabama, has...
Interest Costs Assets Yield Rates Liabilities Rate-sensitive 500 600 Fixed-rate 350 220 Non-earning/Non-paying 150 100 Total 920 Equity 80 [ii] The Monetary Policy Committee at the Bank of England has raised interest rates by 0.5%. To determine interest rate risk, use GAP analysis to show the effect of the rise in rates on the profitability of Wales Bank.
Markum Enterprises is considering permanently adding an additional $182 million of debt to its capital structure. Markum's corporate tax rate is 30%. a. Absent personal taxes, what is the value of the interest tax shield from the new debt? b. If investors pay a tax rate o 40% on interest income, and a tax rate of 20% on income from dividends and capital gains, what is he value o the interest tax shield from the new debt? a. Absent personal...
According to the Fisher effect, an increase in the inflation rate would increase nominal interest ates" O True O False QUESTION 33 Economists believe that the classical dichotomy separating real from nominal variables holds in the long-run. True False QUESTION 3 Assume the economy only produces basketballs. There is a money supply of $1000. The economy produces 50 basketballs that sell for $40 each. What is nominal GDP and money velocity? "Nominal GDP = $50, velocity = 0.5" "Nominal GDP...
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