2. Which of the following is a reason why zero-coupon bonds are the best way for high-income taxpayers to extract maximum value from tax-exempt state and local government bonds? a.The investments pay interest continually. b.The interest earned on the accumulated principal and interest is not tax-exempt.
Q: Blue Light Industries (BLI) is planning to introduce a new LED light bulb, the "ZeroBlue 3000,"…
A: Introduction Cannibalization of the market refers to a decline in revenue brought on by a…
Q: Can you use excel to do the data please.
A: The cost of direct material used is defined as the cost attributed to the production of end…
Q: Which of the following is FALSE when redeeming a bond between semi-annual interest payment dates?
A: Bonds are typically issued at face value, which is the amount that the bondholder will receive when…
Q: the cost of a certain asset is 500000. its life is 10 years with a scrap value of 50000.using the…
A: Alternative 1 : Depreciation rate will be 2 X SLM rate SLM rate is 1/10 years = 10% therefore ,…
Q: The following accounts appear in the ledger of Monroe Entertainment Co. All accounts have normal…
A: Assets :— It is the resources owned by company in the business. Example :- Accounts Receivable,…
Q: Baldwin, Inc. had net sales of $52,200,000 for the year ended May 31, 2024. Its beginning and ending…
A: Introduction: The asset turnover ratio compares a company's sales or revenues to the value of its…
Q: An asset cost $200,000. It has a salvage value of $40,000. It has a 10 year life. What is its…
A: Depreciation is the non-cash expense which is to be reported in the income statement of the entity.…
Q: Exercises 1. At the beginning of the school year, Bailey Eyelash decided to prepare a cash budget…
A: Budget - It is an estimation of Income and expense over a given period of time which is prepared by…
Q: Expenses incurred but not yet paid or recorded are called O prepaid expenses accrued expenses…
A: The things that your business has and can potentially bring about future financial gain are called…
Q: Host nations have adopted competition policy and anti-dumping law. a. Why do multinational…
A: Host nations have adopted competition policy and anti-dumping law. In addition, the host countries…
Q: Oerstman, Inc., uses a standard costing system and develops its overhead rates from the current…
A: The question is based on the concept of Cost Accounting. The difference between the actual amount of…
Q: Q.98. Smith and Jones create SJ Corporation. Smith contributes property with a fair market value…
A: Introduction: A company may be formed by two or more people, who will then contribute their assets…
Q: If business pays rent in advance and debits a Prepaid Rent account, the company receiving the rent…
A: Adjusting journal entry: At year-end when the company finalizes its accounts then any unrecognized…
Q: The following items (in thousands) are taken from the financial statements of Huang Company for the…
A: Net income is the amount of money earned by an entity after deducting the expenses from its…
Q: Yummy-Licious ice cream inc. opened its first store in Calgary in January 2021. It sells 2 types of…
A: The company prepares financial reports to convey the result of the operations and the financial…
Q: Journal entry worksheet
A: Journal entries are the first step in recording financial transactions. It's based on the double…
Q: From the following information of a Textile Company complete the Proforma balance Sheet if Sales are…
A: Balance Sheet :— It is one of the financial statement that shows list of final balances of assets,…
Q: Sandhill Corporation had a projected benefit obligation of $3,210,000 and plan assets of $3,371,000…
A: INTRODUCTION: A component's or asset's initial cost is often written down over a specific period of…
Q: Paul’s Pool Service provides pool cleaning, chemical application, and pool repairs for residential…
A: There are several advantages to preparing budgeted cash receipts and payments: 1. It forces the…
Q: References Knowledge Check 01 Dern Company recently sold a large order of tables to Knoll Furniture…
A: Time value of money :— According to this concept, value of money in present day is greater than the…
Q: Sales of Blistre Autos are 400,000, variable cost is 230,000, fixed cost is 90,000 tax rate is 40%.…
A: Operational leverage, a cost-accounting technique, evaluates how much a business or project may…
Q: Equipment is classified in the statement of financial position as a current asset. property, plant,…
A: ANSWER:- PROPERTY , PLANT AND EQUIPMENT Explanation:- PROPERTY , PLANT AND EQUIPMENT:- Equipment is…
Q: Estimate ending inventory using the dollar-value LIFO retail method. be entered as 12.34%.))
A: The LIFO method is defined as one of the important methods of inventory calculation in which the…
Q: Question 3 Kerisi Sdn Bhd manufactures tents and sleeping bags in two separate production…
A: PREDETERMINED OH RATES predetermined OH rates is Computed dividing the estimated manufacturing…
Q: models. (Round your answers to the nearest cent as needed.) 1. A building contractor gives a $15,500…
A: The promissory note is a type of legal lending document issued by the borrower promising to pay the…
Q: How much is P1200 worth at the end of 1 year if the interestvrate of 5.5% is compunded quarterly
A: Formula: A = P(1+r/n)^nt Where, A = Amount. P = Principal amount = P1200 r = rate of interest =…
Q: What other types of inventory could be disclosed by businesses for financial reporting?
A: Inventory includes both the goods that are available for purchase and the raw materials needed to…
Q: A machine has a first cost of P109,264.59 and has an expected salvage value after 10 years…
A: Depreciation :— It is the decrease in the value of asset due to continuos use of asset. Declining…
Q: QUESTION 1 The following is the budget of a manufacturing enterprise that produces only one type of…
A:
Q: Questions True False The balance sheet provides owners with an estimate of the firm's worth for a…
A: Since multiple questions have been posted, as per the guidelines only the first question will be…
Q: Benson Plastics Company deposits all receipts and makes all payments by check. The following…
A: The bank reconciliation statement is prepared to equate the balances of cash book and passbook with…
Q: What two IRS Code Sections generally applies to dividends? Give Code Section When are dividends…
A: “Since you have asked multiple questions, we will solve the first question for you. If youwant any…
Q: Leo contributed $28,000 in cash for a 25% interest in a partnership. His share of $27,000. In…
A: A partnership creates a K-1 to determine the proportion of profits that each partner will receive…
Q: The Bond for an item under temporary importation and 1/60 partial GST Value of the item USD $275000…
A: Corporate Bond - Corporate bonds are obligations that corporation issue to both public and private…
Q: Given the following: January 1 inventory. April 1 June 1 November 1 Cost of ending inventory Number…
A: Inventory valuation method includes: FIFO Method LIFO Method Weighted average cost method FIFO…
Q: Marigold Company had planned to complete its latest batch of pillar candles before year-end, but it…
A: Ending inventory is the remaining units that are left incomplete at the end of the period.
Q: CASE 26 All taxpayers are VAT taxpayers. Prices give Sale by Mr. A to Mr. B for P140,000; Sale by…
A:
Q: 1. Can a Corporate Redemption be treated as a dividend? If so, what is the effect on E&P? Give Code…
A: Dividend refers to the reward which are paid to the shareholders for the investment in the equity of…
Q: D Question 10 20 pts Jason rents his vacation home for 60 days and lives in the home for 30 days.…
A:
Q: The Bond for an item under temporary importation and 1/60 partial GST
A: Bond refers to an acknowledgment of debt. There is a fixed rate of interest paid on bond and the…
Q: At December 31, 2017, bere any year-end adjustments, Cable Car Company's Insurance Expense account…
A: Insurance premiums are the costs to cover the risk. Sometimes a company pays for a future period of…
Q: Cost per unit $1.00 $1.05 Dec. 19 $1.10 Dec. 21 $1.12 The company sold 100 units at $2.00 per unit…
A: Under Perpetual inventory system the cost of good sold is updated simultaneously, that is after…
Q: For the given corporate bond, whose annual simple interest rate is provided, find the semiannual…
A: BOND Bond are Shown Under Non Current Liabilities in the Balance sheet Of the Company. Bond is…
Q: What benefit does a country get out of remaining insularly and isolated in their accounting…
A: Each and every country have own policies regarding the accounting standards and rules and…
Q: transactions described on the right uses the average daily balance method to calculate interest. The…
A: Transactions - A transaction is a commercial occurrence that results in a monetary impact on the…
Q: Justify whether you would you make this loan for two years as they have requested or not? 2) Discuss…
A: Given in the question: Minimum points required to get a loan from bank = 30 points Points are…
Q: Part B is the incorrect answer
A: The LIFO method is defined as one of the important methods of inventory calculation in which the…
Q: Periodic Inventory Using FIFO, LIFO, and Weighted Average Cost Methods The units of an item…
A: Inventory valuation method includes: FIFO Method LIFO Method Weighted average cost method FIFO…
Q: XYZ bought an asset that cost $200,000 at the beginning of the year. It has a salvage value of…
A: Depreciation appears to be the amount through which the cost of fixed assets is reduced as a result…
Q: Estimating Useful Life and Percent Used Up The property and equipment section of the lululemon…
A: The property plant and machinery represent the non-current asset of the company which will be used…
2. Which of the following is a reason why zero-coupon bonds are the best way for high-income taxpayers to extract maximum value from tax-exempt state and local government bonds?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- 7. Zero-coupon bonds are the best way for high-income taxpayers to extract maximum value from tax-exempt state and local government bonds because: a.Zero-coupon bonds are sold for nearly their full face value and provide most of their income in the form of interest. b.Zero-coupon bonds allow the investor to make additional tax-exempt investments. c.The interest earned on the accumulated principal and interest is not tax-exempt. d.The investments pay interest continually. e.Zero-coupon bonds include more transaction fees.your professor has taught you that because municipal bonds (or any other tax-saving) bond would offer a tax saving on the interest income, the interest rate offered by such bonds may be even lower than the treasury bonds. while what your professor has told you is correct, imagine a situation where income tax rates are reduced. describe the effect of a reduction in income tax rates on the interest rates of municipal bonds? would interest rates on Treasury bonds be affected as well? how?Why do companies often prefer debt financing to other forms of financing for capitalinvestments?a. Actually, they don't prefer debt financing. They usually try to use retainedearnings for capital investments.b. Because bond holders are happy to just break even on their bonds.c. Because the MARR all but guarantees the projects will return yields greater thanthe interest on the loans.d. Because debt interest is tax deductible, reducing significantly the actual cost ofborrowing money for projects.
- Which of the following statements is CORRECT? a. One disadvantage of zero coupon bonds is that the issuing firm cannot realize any tax savings from the use of debt until the bonds mature. b. Income bonds must pay interest only if the company earns the interest. Thus, these securities cannot bankrupt a company prior to their maturity, and this makes them safer to the issuing corporation than "regular" bonds. c. Once a firm declares bankruptcy, it must be liquidated by the trustee, who uses the proceeds to pay bondholders, unpaid wages, taxes, and legal fees. d. Other things held constant, a callable bond should have a lower yield to maturity than a noncallable bond. e. A firm with a sinking fund that gives it the choice of calling the required bonds at par or buying the bonds in the open market would generally choose the open market purchase if the coupon rate exceeded the going interest rate.STRIPS are: a) Government-backed schemes that allow investors to hedge against market risk. b) Government bonds linked to inflation rates. c) Tax-free saving accounts aimed at increasing retirement income d) Corporate bondsWhen a corporation invests borrowed money in assets that generate profits greater than the after-tax cost of the debt, it increases the return on equity for common shareholders. creates financial leverage. has a mix of debt and equity in its capital structure. does all of these options. If the effective rate of interest is greater than the contract rate, the bonds will sell at par. a premium. a discount. any of these choices, depending on other circumstances.
- Municipal Bonds tax exemption is a characteristic that made this bond attractive to investors in low marginal tax rate level Seleccione una: Verdadero FalsoIf Congress wants to stimulate the economy, explainhow it might alter each of the following: (a) personaland corporate tax rates, (b) depreciation expenseschedules, and (c) the differential between the taxrate on personal income and long-term capitalgains. How would these changes affect corporateprofitability and free cash flow? How would theyaffect investors’ choices regarding which securities to hold in their portfolios? Might any of theseactions affect the general level of interest rates?If the municipal bond rate is 6% and the corporate bond rate is 8%, what is the marginal tax rate, assuming investors are indifferent between the two bonds?
- Which is not a benefit of debt to the corporation?a. interest payments are tax deductibleb. when debt is used heavily, it increases stock valuec. In periods of inflation, debt is paid back with amounts that are worth less than the ones borrowed.d. compared to equity, debts have a lower cost of capitale. answer not givenWhich of the following is CORRECT? Select one: a. When calculating the cost of debt, a company needs to adjust for taxes, because interest payments are deductible by the paying corporation. b. When calculating the cost of preferred stock, companies must adjust for taxes, because dividends paid on preferred stock are deductible by the paying corporation. c. Because of tax effects, an increase in the risk-free rate will have a greater effect on the after-tax cost of common stock as measured by the CAPM. d. Higher flotation costs reduce investors' expected returns, and that leads to a reduction in a company's WACC. e. All of the above are correct. Which of the following is CORRECT? Select one: a. If the NPV of a project is negative, the IRR for the project must also be negative. b. A project's MIRR can never exceed its IRR. c. If a project with normal cash flows has an IRR less than WACC, the project must have a positive NPV. d. If Project 1's IRR exceeds Project 2's IRR, then 1 must…Which of the following statements is CORRECT? a. Sinking fund provisions never require companies to retire their debt; they only establish "targets" for the company to reduce its debt over time. b. Most sinking funds require the issuer to provide funds to a trustee, who holds the money so that it will be available to pay off bondholders when the bonds mature. c. Sinking fund provisions sometimes turn out to adversely affect bondholders, and this is most likely to occur if interest rates decline after the bond was issued. d. If interest rates increase after a company has issued bonds with a sinking fund, the company will be less likely to buy bonds on the open market to meet its sinking fund obligation and more likely to call them in at the sinking fund call price. e. A sinking fund provision makes a bond more risky to investors at the time of issuance.