Melinda invests $200,000 in a City of Heflin bond that pays 6 percent interest. Alternatively, Melinda could have invested the $200,000 in a bond recently issued by Surething Inc., that pays 8 percent interest and has risk and other nontax characteristics similar to the City of Heflin bond. Assume Melinda’s marginal tax rate is 25 percent. (Leave no cells blank - be sure to enter "0" wherever required.)Required:
What is her after-tax rate of return for the City of Heflin bond?
How much explicit tax does Melinda pay on the City of Heflin bond?
How much implicit tax does she pay on the City of Heflin bond?
How much explicit tax would she have paid on the Surething Inc. bond?
What is her after-tax rate of return on the Surething Inc. bond?
Answers
Answer:
What is her after-tax rate of return for the City of Heflin bond?
- Melinda's after tax rate of return for the City of Heflin bonds = $200,000 x 6% = $12,000. Interest revenue from city bonds is not taxed.
How much explicit tax does Melinda pay on the City of Heflin bond?
- $0
How much implicit tax does she pay on the City of Heflin bond?
- $4,000. The tax difference between the yields of the city bond vs Surething bond.
How much explicit tax would she have paid on the Surething Inc. bond?
- ($200,000 x 8%) x 25% = $4,000
What is her after-tax rate of return on the Surething Inc. bond?
- ($16,000 - $4,000) / $200,000 = $12,000 / $200,000 = 6%
Related Questions
A machine that cost $400,000 has an estimated residual value of $40,000 and an estimated useful life of four years. The company uses straight-line depreciation. Calculate its book value at the end of year 3What is the Book Value?A machine that cost $400,000 has an estimated residual value of $40,000 and an estimated useful life of 20,000 machine hours. The company uses units-of-production depreciation and ran the machine 3,000 hours in year 1, 8,000 hours in year 2, and 6,000 hours in year 3.Calculate its book value at the end of year 3.A machine that cost $400,000 has an estimated residual value of $40,000 and an estimated useful life of four years. The company uses double-declining-balance depreciation.Calculate its book value at the end of year 3.
On January 1, 2019, Sharon Matthews established Tri-City Realty, which completed the following transactions during the month: Jan. 1 Sharon Matthews transferred cash from a personal bank account to an account to be used for the business, $30,000. 2 Paid rent on office and equipment for the month, $2,450. 3 Purchased supplies on account, $2,200. 4 Paid creditor on account, $850. 5 Earned fees, receiving cash, $14,940. 6 Paid automobile expenses (including rental charge) for month, $1,580, and miscellaneous expenses, $470. 7 Paid office salaries, $2,000. 8 Determined that the cost of supplies used was $1,100. 9 Withdrew cash for personal use, $3,200. Required: 1. Journalize entries for transactions Jan. 1 through 9. Refer to the Chart of Accounts for exact wording of account titles. 2. Post the journal entries to the T accounts, selecting the appropriate date to the left of each amount to identify the transactions. Determine the account balances after all posting is complete. Accounts containing only a single entry do not need a balance. 3. Prepare an unadjusted trial balance as of January 31, 2019. 4. Determine the following: a. Amount of total revenue recorded in the ledger. b. Amount of total expenses recorded in the ledger. c. Amount of net income for January. 5. Determine the increase or decrease in owner’s equity for January.
A. Think of a product and describe the stages of production the product goes through.
A bank system contains data on customers (identified by name and address) and their accounts. Each account has a balance and there are 2 type of accounts: one for savings which offers an interest rate, the other for investments, used to buy stocks.a. Trueb. False
Answers
Answer:
Gross pay = 600
Deductions = 99.9
Net Pay = 500.1
Explanation:
Requirement A:
Gross Pay = 40 hours x $15/hour
Gross Pay = $600
Requirement B:
Security Tax ( 600 x 6.2%) = $37.2
Medicare tax ( 600 x 1.45%) = $8.7
Federal Income = $32
Health Insurance = $22
Total deductions = $99.9
Requirement C :
Net Pay = Gross pay - all deductions
Net Pay = $600 - 99.9
Net Pay = 500.1
Approximately how many hours per year will the solar panels need to operate to enable this project to break even?
Answers
Answer:
It will take 6,534.31 hours per year for the solar panels to operate to enable this project to break even
Explanation:
Discount rate = 30% = 0.3
Looking at one hour of operation in each year = 200 kW x $0.30 Kw/hr
= $60 value of electricity per year
Compound interest factor for a discount rate of 30% = 3.3158
(taken from compound interest factor table or computed using formula ∑1/(1+r)^t , where r = 30%, and t = 1 to 30)
Present value of operating the solar panels for 1 hour per year = 60 × 3.3158 = $ 198.95
For break even it would need to run = 1.3 million ÷ 198.95
= 6,534.31 hours per year
The solar panels need to operate for approximately 236,364 hours per year to enable this project to break even.
To determine the number of hours per year the solar panels need to operate to break even, we can calculate the present value of operating the solar panels for 1 hour per year over the 20-year lifespan of the panels.
The annual operating cost is $0.30 per kWh, and the capacity of the solar panels is 200 kW. So, for each hour of operation, the cost is:
Cost per hour = 200 kW * $0.30/kWh = $60
Now, we'll calculate the present value of this cost over 20 years at a 30% discount rate:
PV Cost = $60 / ≈ $5.50
The university spent $1.3 million upfront to install the panels. To break even, the present value of operating the panels should cover this cost:
$1,300,000 = $5.50 * X
Where X is the number of hours per year the panels need to operate. Solving for X:
X ≈ $1,300,000 / $5.50 ≈ 236,364 hours per year.
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Direct Materials 10 pounds $ 1.90 per pound $ 19.00
Direct Labor 0.30 hour $ 6.80 per hour 2.04
$ 21.04
During November, TaskMaster purchased 200,000 pounds of direct materials at a total cost of $440,000. The total factory wages for November were $48,000, 80% of which were for direct labor. TaskMaster manufactured 19,000 units of product during November using 175,000 pounds of direct materials and 6,000 direct labor hours.
What is the direct labor price (rate) variance for November?
Answers
Answer:
$2,400 Favourable
Explanation:
direct labor price (rate) variance =(Aq×Ap)-(Aq×Sp)
=(6,000×$6.40) - (6,000×$ 6.80)
= $2,400 Favourable
Ap = (48,000×80%)/6,000
= $6.40
Answer:
$2,400 Favourable
Explanation:
direct labor price (rate) variance =(Aq×Ap)-(Aq×Sp)
=(6,000×$6.40) - (6,000×$ 6.80)
= $2,400 Favourable
Ap = (48,000×80%)/6,000
= $6.40
Explanation:
Answers
One of the most important things to establish in business from your first day is:
- B. Credibility
Business Credibility
This refers to the quality that your business partners are able to trust you and you are accountable and you as a business person has good ethics and can be relied on.
With this in mind, we can see that the first thing to establish in business is credibility.
Therefore, the correct answer is option B
Read more about credibility here:
brainly.com/question/14032595
Direct Labor Hours: 600,000 550,000
Manufacturing Overhead Estimated $720,000 $680,000
Answers
Answer:
Underapplied overhead= $20,000
Explanation:
Giving the following information:
Estimated Actual
Direct Labor Hours: 600,000 550,000
Manufacturing Overhead Estimated $720,000 $680,000
I assume that we need to calculate the over/under applied overhead.
First, we need to determine the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 720,000/600,000
Predetermined manufacturing overhead rate= $1.2 per direct labor hour
Now, we apply overhead based on actual hours:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 1.2*550,000
Allocated MOH= $660,000
Finally, the under/over applied overhead:
Under/over applied overhead= real overhead - allocated overhead
Under/over applied overhead= 680,000 - 660,000
Underapplied overhead= $20,000
Answers
Answer:
The correct answer is letter "B": Economies of agglomeration; corresponding diseconomies.
Explanation:
Economies of agglomeration refer to a type of economy in which companies are located one close to another to take advantage of their core competencies. This economic structure typically helps businesses to reduce relocation and delivery costs increasing their profits but in some other cases, the costs could increase if some of the firms lost their economies of scale.
Thus, metropolises in the U.S. must find ways to boost the benefit of economies of agglomeration minimizing the negative effects of the diseconomies of scale in which some firms might fall.