Sandra would like to organize BAL as either an LLC (taxed as a sole proprietorship) or a C corporation. In either form, the entity is expected to generate an 7 percent annual before-tax return on a $510,000 investment. Sandra’s marginal income tax rate is 37 percent and her tax rate on dividends and capital gains is 23.8 percent (including the 3.8 percent net investment income tax). If Sandra organizes BAL as an LLC, she will be required to pay an additional 2.9 percent for self-employment tax and an additional 0.9 percent for the additional Medicare tax. BAL’s income is not qualified business income (QBI) so Sandra is not allowed to claim the QBI deduction. Assume that BAL will distribute all of its after-tax earnings every year as a dividend if it is formed as a C corporation. (Round your intermediate computations to the nearest whole dollar amount.)

a. How much cash after taxes would Sandra receive from her investment in the first year if BAL is organized as either an LLC or a C corporation?

b. What is the overall tax rate on BAL’s income in the first year if BAL is organized as an LLC or as a C corporation? (Round your final answers to 2 decimal places.)

Andrea would like to organize SHO as either an LLC (taxed as a sole proprietorship) or a C corporation. In either form, the entity is expected to generate an 8 percent annual before-tax return on a $530,000 investment. Andrea’s marginal income tax rate is 35 percent and her tax rate on dividends and capital gains is 15 percent. Andrea will also pay a 3.8 percent net investment income tax on dividends and capital gains she recognizes. If Andrea organizes SHO as an LLC, Andrea will be required to pay an additional 2.9 percent for self-employment tax and an additional 0.9 percent for the additional Medicare tax. Further, she is eligible to claim the full deduction for qualified business income. Assume that SHO will pay out all of its after-tax earnings every year as a dividend if it is formed as a C corporation. (Do not round intermediate calculations and round your final answers to the nearest whole dollar.)

a. How much cash after taxes would Andrea receive from her investment in the first year if SHO is organized as either an LLC or a C corporation?

b. What is the overall tax rate on SHO’s income in the first year if SHO is organized as an LLC or as a C corporation?

Sandra would like to organize BAL as either an LLC (taxed as a sole proprietorship) or a C corporation. In either form, the entity is expected to generate an 14 percent annual before-tax return on a $670,000 investment. Sandra’s marginal income tax rate is 37 percent and her tax rate on dividends and capital gains is 23.8 percent (including the 3.8 percent net investment income tax). If Sandra organizes BAL as an LLC, she will be required to pay an additional 2.9 percent for self-employment tax and an additional 0.9 percent for the additional Medicare tax. BAL’s income is not qualified business income (QBI) so Sandra is not allowed to claim the QBI deduction. Assume that BAL will distribute all of its after-tax earnings every year as a dividend if it is formed as a C corporation. (Round your intermediate computations to the nearest whole dollar amount.)

a. How much cash after taxes would Sandra receive from her investment in the first year if BAL is organized as either an LLC or a C corporation?

b. What is the overall tax rate on BAL’s income in the first year if BAL is organized as an LLC or as a C corporation?(Round your final answers to 2 decimal places.)

Tesla Motors is a California-based company that designs, manufactures, and markets high-performance electric cars. The company's first vehicle to hit the market was the Tesla Roadster, a sporty two-seater. Tesla's performance specifications are truly impressive. For example, the Roadster can accelerate from 0 to 100km/h in under 3.8 seconds. This type of acceleration is comparable to many high-performance Ferrari combustion engine models. The Tesla luxury sedan Model S and sport-utility vehicle Model X have also received accolades for artful design and performance. Not surprisingly, the electric car company has attracted many high-profile customers including Ben Affleck, Matt Damon, and Laurence Fishburne. Tesla automobiles use lithium-ion battery cells and are the first electric vehicles to have a range greater than 320kms per charge. Many reports suggest that Tesla's energy efficiencies are superior to those of all other electric and hybrid cars. These efficiencies come with a cost, however. The base price of the Model S, Model X, and Roadster are about $60,000, $80,000, and $110,000, respectively. Discuss and explain 5 macro-environmental forces that may affect Tesla's business in Canada

Sandra would like to organize BAL as either an LLC (taxed as a sole proprietorship) or a C corporation. In either form, the entity is expected to generate an 13 percent annual before-tax return on a $660,000 investment. Sandra’s marginal income tax rate is 37 percent and her tax rate on dividends and capital gains is 23.8 percent (including the 3.8 percent net investment income tax). If Sandra organizes BAL as an LLC, she will be required to pay an additional 2.9 percent for self-employment tax and an additional 0.9 percent for the additional Medicare tax. BAL’s income is not qualified business income (QBI) so Sandra is not allowed to claim the QBI deduction. Assume that BAL will distribute all of its after-tax earnings every year as a dividend if it is formed as a C corporation. (Round your intermediate computations to the nearest whole dollar amount.)

a. How much cash after taxes would Sandra receive from her investment in the first year if BAL is organized as either an LLC or a C corporation?

b. What is the overall tax rate on BAL’s income in the first year if BAL is organized as an LLC or as a C corporation?(Round your final answers to 2 decimal places.)

An Italian company, New Century Corp, enters into a 1-year interest rate swap with Northern European Bank. The notional principle of the swap is €100 million. Payments will be made semiannually on the basis of 180/360 (180 days in the settlement period and 360 days per year). New Century will pay a fixed rate of 4% and receive floating rate Euribor plus 1%. The 180-day Euribor rates are as below:
Current: 2.8%       In 1 quarter: 3%   In 2 quarters: 3.4%   In 3 quarters: 3.7%
A. Determine the initial exchange of cash that occurs at the start of the swap.
B. Determine the semiannual payments for the first year (first half, second half).  
C. Determine the final exchange of cash that occurs at the end of the swap.

Ms. Jenny Joy is planning to open her first own business project: a little café close to the university district of the imaginary town of Brightside. She has rented a small, but nice venue for the café. She has worked hard to keep the target opening date of 1 June. There is a very important report missing from her paperwork though; she does not know how much profit she can expect during the first 3 months of operation. She remembers from university finance class that the best way to prepare a profit plan is to consider different scenarios. She has gathered all the relevant information for the profit analysis and for the sake of simplicity estimated two possible outcomes: “good” and “almost good”.

Information about costs and revenues:
- Average revenue from drinks and food: €22 per person
- Cost of drinks and food: €14 per person
- Rent fee: €1000 per month
- Utilities: €1200 per quarter
- She does not plan to hire employees in the first three months.
- Renting the coffee machine: €6000 per year
- Other costs: €3000 in the first month and 5% less in every upcoming month

Required:

1. Prepare a monthly analysis of Ms Joy’s profits based on her revenues and costs for the three months under both scenarios. (Please show all needed calculations and explanations)

2. Calculate her expected profit for the quarter

3. Name what are the variable and fixed costs from the above listed cost elements? Explain your answer.

4. Give two examples: one example of semi variable and one example of stepped costs that can be linked to the operation of the cafe?

ABC has 1 million shares​ outstanding, each of which has a price of $ 22. It has made a takeover offer of XYZ Corporation which has 1 million shares​ outstanding, and a price per share of $ 2.58. Assume that the takeover will occur with certainty and all market participants know this.​ Furthermore, there are no synergies to merging the two firms.

a. Assume ABC made a cash offer to purchase XYZ for $ 3.8 million. What happens to the price of ABC and XYZ on the​ announcement? What premium over the current market price does this offer​ represent?

b. Assume ABC makes a stock offer with an exchange ratio of 0.14. What happens to the price of ABC and XYZ this​ time? What premium over the current market price does this offer​ represent?

c. At current market​ prices, both offers are offers to purchase XYZ for $ 3.8 million. Does that mean that your answers to parts ​(a​) and ​(b​) must be​ identical? Explain.

1. “Both private goods and club goods are excludable, so there are no reasons for the government to regulate or tax private goods and club goods producers.” Do you agree with this statement? Justify your answer.

2. Explain why does an increase in the price of ivory threatens the elephant population in Africa, while an increase in the price of beef protects the cow farms in Texas.

3. “When the market-equilibrium quantity of good “x” is larger than the socially-optimal quantity of good “x,” the production of good “x” conveys a positive externality.” Do you agree with this statement? Explain your answer

Thank you!

The mandatory spending items (e.g. Medicaid, Medicare, Social Security) are increasing more rapidly than the discretionary spending portion of the budget. What reforms would you propose in order to constrain government spending and reduce the national debt? (The increases to Social Security are not supposed to be included in the U.S. national debt. The unfunded liability (future payments) for Social Security is supposedly held in the Social Security Trust Fund.)