A husband and wife, together, can make an annual gift to an individual donee of how much each year without incurring a potential estate tax on the gifts? A) $5,000 B) $12,000 C) $24,000 D) zero; all gifts are taxable. ANSWER C
Date: September 19th, 2020
The cost of operating an automobile represents a variable cost. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Bob and his wife Emily have agreed to make gifts each year to their three children. The maximum amount they can jointly give each year without incurring a potential estate tax on the gifts is A) $66,000. B) $72,000. C) $30,000. D) $24,000. ANSWER A
Date: September 19th, 2020
Opportunity costs include only out-of-pocket expenses. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
The cost of owning an automobile represents a fixed cost. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
A $1,000 par bond is currently selling for $1,100. It has a 9% coupon rate, fifteen years remaining to maturity, and pays interest semi-annually. If the firm’s tax rate is 35%, what is the after-tax cost of debt? A) 9.00% B) 7.84% C) 6.07% D) 5.85% E) 5.10% ANSWER E
Date: September 19th, 2020
Among the reasons many firms DON’T use the payback period as a guideline in capital investment decisions are all of the following EXCEPT: A) it gives consideration to the timing of cash flows. B) it uses an appropriate measure of risk. C) it recognizes cash flows which occur after the payback period. D) it is […]
Date: September 19th, 2020
Interest payments on auto loans are not tax-deductible. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The cost of owning an automobile is a sunk cost. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Spiro invested $800 in an IRA. If he has a 15% marginal tax rate, and the contribution is tax deductible, the tax impact in the year of the investment will be A) that he will pay $120 more in taxes. B) that he will pay $120 less in taxes. C) that he will pay $800 […]
Date: September 19th, 2020
