Formulate the outline of a precision pricing policy for a four-star hotel designed to accommodate business guests as well as tourists from all over the world. Explain your answer

You are a CPA hired to represent a client that is currently under examination by the IRS. The client is the president and 95% shareholder of a building supply sales and warehousing business. He also owns 50% of the stock of a construction company. The client's son owns the remaining 50% stock of a construction company. Your client received a Notice of Proposed Adjustments (NPA) on three (3) significant issues related to the building supply business for the years under examination. The three (3) issues identified in the Notice of Proposed Adjustments (NPA) are 1) unreasonable compensation, 2) stock redemptions, and 3) a rental loss. Additional facts regarding the issues are as follows: 1) Unreasonable compensation: The taxpayer receives a salary of $10 million composed of a $5 million base salary plus 5% of gross receipts not exceed $5 million. The total grossreceipts of the building supply business are $300 million. The NPA by the IRS disallows the salary based on 5% of gross receipts as a constructive dividends. 2) Stock redemption: During the audit period, the construction company redeemed 50% of the outstanding stock owned by the client and 50% of the stock owned by the client's son, leaving each with the same ownership percentage of 50%. The IRS treated the redeemption as a distribution under Section 301 of the Internal Revenue Code (IRC). 3) Rental loss: The rental loss results from a building leased to the construction company owned by the client and his son. Use the Internet to research the rules and income tax laws regarding unreasenable compensation, stock redemptions treated as dividends and related party losses. Based on the following tax reasearch process: 1) Determine the facts. 2) Identify the issues (questions). 3) Locate the applicable authorities. 4) Evaluate the authorities and choosethose to follow where the authorities conflict. 5) Analyze the factsin terms of the applicable authorities. 6) Communication conclusions and recommendations to the client.Write a three to four (3-4) page paper in which you: (1) Based on your research and the facts stated in the scenario, prepare a recommendation for your client in which you advise either acceptance of the proposed adjustments or further appeal of the issue based on the potential for prevailing on appeal. (2) Create a tax plan for the future redemption of the client's stock owned in the construction company that will not be taxed according to Section 301 of the IRC. (3) Propose a strategy for your client to receive similar amounts in compensation in the future and avoid the taxation as a constructive dividend.

You are a CPA hired to represent a client that is currently under examination by the IRS. The client is the president and 95% shareholder of a building supply sales and warehousing business. He also owns 50% of the stock of a construction company. The client's son owns the remaining 50% stock of a construction company. Your client received a Notice of Proposed Adjustments (NPA) on three (3) significant issues related to the building supply business for the years under examination. The three (3) issues identified in the Notice of Proposed Adjustments (NPA) are 1) unreasonable compensation, 2) stock redemptions, and 3) a rental loss. Additional facts regarding the issues are as follows: 1) Unreasonable compensation: The taxpayer receives a salary of $10 million composed of a $5 million base salary plus 5% of gross receipts not exceed $5 million. The total grossreceipts of the building supply business are $300 million. The NPA by the IRS disallows the salary based on 5% of gross receipts as a constructive dividends. 2) Stock redemption: During the audit period, the construction company redeemed 50% of the outstanding stock owned by the client and 50% of the stock owned by the client's son, leaving each with the same ownership percentage of 50%. The IRS treated the redeemption as a distribution under Section 301 of the Internal Revenue Code (IRC). 3) Rental loss: The rental loss results from a building leased to the construction company owned by the client and his son. Use the Internet to research the rules and income tax laws regarding unreasenable compensation, stock redemptions treated as dividends and related party losses. Based on the following tax reasearch process: 1) Determine the facts. 2) Identify the issues (questions). 3) Locate the applicable authorities. 4) Evaluate the authorities and choosethose to follow where the authorities conflict. 5) Analyze the factsin terms of the applicable authorities. 6) Communication conclusions and recommendations to the client.Write a three to four (3-4) page paper in which you: (1) Based on your research and the facts stated in the scenario, prepare a recommendation for your client in which you advise either acceptance of the proposed adjustments or further appeal of the issue based on the potential for prevailing on appeal. (2) Create a tax plan for the future redemption of the client's stock owned in the construction company that will not be taxed according to Section 301 of the IRC. (3) Propose a strategy for your client to receive similar amounts in compensation in the future and avoid the taxation as a constructive dividend.

ou are a CPA hired to represent a client that is currently under examination by the IRS. The client is the president and 95% shareholder of a building supply sales and warehousing business. He also owns 50% of the stock of a construction company. The client's son owns the remaining 50% stock of a construction company. Your client received a Notice of Proposed Adjustments (NPA) on three (3) significant issues related to the building supply business for the years under examination. The three (3) issues identified in the Notice of Proposed Adjustments (NPA) are 1) unreasonable compensation, 2) stock redemptions, and 3) a rental loss. Additional facts regarding the issues are as follows: 1) Unreasonable compensation: The taxpayer receives a salary of $10 million composed of a $5 million base salary plus 5% of gross receipts not exceed $5 million. The total grossreceipts of the building supply business are $300 million. The NPA by the IRS disallows the salary based on 5% of gross receipts as a constructive dividends. 2) Stock redemption: During the audit period, the construction company redeemed 50% of the outstanding stock owned by the client and 50% of the stock owned by the client's son, leaving each with the same ownership percentage of 50%. The IRS treated the redeemption as a distribution under Section 301 of the Internal Revenue Code (IRC). 3) Rental loss: The rental loss results from a building leased to the construction company owned by the client and his son. Use the Internet to research the rules and income tax laws regarding unreasenable compensation, stock redemptions treated as dividends and related party losses. Based on the following tax reasearch process: 1) Determine the facts. 2) Identify the issues (questions). 3) Locate the applicable authorities. 4) Evaluate the authorities and choosethose to follow where the authorities conflict. 5) Analyze the factsin terms of the applicable authorities. 6) Communication conclusions and recommendations to the client.Write a three to four (3-4) page paper in which you: (1) Based on your research and the facts stated in the scenario, prepare a recommendation for your client in which you advise either acceptance of the proposed adjustments or further appeal of the issue based on the potential for prevailing on appeal. (2) Create a tax plan for the future redemption of the client's stock owned in the construction company that will not be taxed according to Section 301 of the IRC. (3) Propose a strategy for your client to receive similar amounts in compensation in the future and avoid the taxation as a constructive dividend.

You are a CPA hired to represent a client that is currently under examination by the IRS. The client is the president and 95% shareholder of a building supply sales and warehousing business. He also owns 50% of the stock of a construction company. The client's son owns the remaining 50% stock of a construction company. Your client received a Notice of Proposed Adjustments (NPA) on three (3) significant issues related to the building supply business for the years under examination. The three (3) issues identified in the Notice of Proposed Adjustments (NPA) are 1) unreasonable compensation, 2) stock redemptions, and 3) a rental loss. Additional facts regarding the issues are as follows: 1) Unreasonable compensation: The taxpayer receives a salary of $10 million composed of a $5 million base salary plus 5% of gross receipts not exceed $5 million. The total grossreceipts of the building supply business are $300 million. The NPA by the IRS disallows the salary based on 5% of gross receipts as a constructive dividends. 2) Stock redemption: During the audit period, the construction company redeemed 50% of the outstanding stock owned by the client and 50% of the stock owned by the client's son, leaving each with the same ownership percentage of 50%. The IRS treated the redeemption as a distribution under Section 301 of the Internal Revenue Code (IRC). 3) Rental loss: The rental loss results from a building leased to the construction company owned by the client and his son. Use the Internet to research the rules and income tax laws regarding unreasenable compensation, stock redemptions treated as dividends and related party losses. Based on the following tax reasearch process: 1) Determine the facts. 2) Identify the issues (questions). 3) Locate the applicable authorities. 4) Evaluate the authorities and choosethose to follow where the authorities conflict. 5) Analyze the factsin terms of the applicable authorities. 6) Communication conclusions and recommendations to the client.Write a three to four (3-4) page paper in which you: (1) Based on your research and the facts stated in the scenario, prepare a recommendation for your client in which you advise either acceptance of the proposed adjustments or further appeal of the issue based on the potential for prevailing on appeal. (2) Create a tax plan for the future redemption of the client's stock owned in the construction company that will not be taxed according to Section 301 of the IRC. (3) Propose a strategy for your client to receive similar amounts in compensation in the future and avoid the taxation as a constructive dividend.

A construction company specializing in drilling horizontal holes across rivers or lakes with diameter ranging from 12 to 24 inches is currently engaging in a construction project in Dallas/Fort Worth Area. According to the regulations of the municipality where the projects locates, construction activities cannot be carried out during weekends and holidays. Therefore, during the coming Thanksgiving, the construction will be suspended. The construction company could resume its work after Thanksgiving. As a construction project engineer for the project, what kind of problem can you predict? Please write briefly about your prediction BASED ON THE CONCEPT OF EFFECTIVE STRESS? Please explain how effective stress would affect the drilling procedures after a long lay-off

Determine the after-tax factor to use in the WACC formula. Show all work

1.

The final inputs needed for the WACC formula is the weighted percentages of equity and debt.

Using the values above, calculate both percentages here.

Total capitalization of company:

Weighted equity percentage:

Weighted debt percentage:

2. Now that you have gathered all of the inputs necessary for the WACC formula, calculate the WACC percentage. Show your work.

3. What does the weighted average cost of capital percentage mean to the owners of BHT?

Suppose that Disney is considering one more Toy Story movie. The company is not confident in box office sales, but they do believe that the file will create merchandising opportunities (DVDs, toys, clothes,..etc). Their early analysis believes the move will have an NPV of -$43.00 million if you only look at ticket sales in the theater. However, they also believe that the movie will create sales of $80.00 million per year in merchandise. The merchandise sales will decline each year by 21.00% in perpetuity. Let’s assume that after-tax operating margin on these sales is 14.00%, and that Disney has a cost of capital at 8.00%. What is the cash flow created by the merchandise side effect in the first year? (answer in terms of millions, so 1,000,000 would be 1.00)

Let’s value this as a perpetuity. The merchandise sales will continue indefinitely, BUT the sales will decrease each year. What is the net NPV for creating the movie? (answer in terms of millions, so 1,000,000 would be 1.00)

Suppose that Disney is considering one more Toy Story movie. The company is not confident in box office sales, but they do believe that the file will create merchandising opportunities (DVDs, toys, clothes,..etc). Their early analysis believes the move will have an NPV of -$39.00 million if you only look at ticket sales in the theater. However, they also believe that the movie will create sales of $82.00 million per year in merchandise. The merchandise sales will decline each year by 26.00% in perpetuity. Let’s assume that after-tax operating margin on these sales is 11.00%, and that Disney has a cost of capital at 10.00%.

A) What is the cash flow created by the merchandise side effect in the first year? (answer in terms of millions, so 1,000,000 would be 1.00)

B) Let’s value this as a perpetuity. The merchandise sales will continue indefinitely, BUT the sales will decrease each year. What is the net NPV for creating the movie? (answer in terms of millions, so 1,000,000 would be 1.00)