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A self-employed commercial artist reports taxable income of $7,000. In reality, her income is considerably higher however much of it takes the form of cash for small projects and thus is easy to conceal. She deliberates herself part of the underground economy and defends her behaviour as a tactic that allows her small business to survive. If the business were to fail she contends the government would receive even less tax revenue.
Q1 is the need to survive a reasonable defence for the practice described here? Describe your answer.
Q2 If the practice of covering income is widespread as implied by the phrase underground economy, is it really wrong? Utilizing information from your textbook to defend your answer.
Explain What economic concept is central to proving that risk neutral pricing functions in the establishing of option prices?
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Predict the economic and business environment over the next five (5) years, indicating at least two (2) ways it may impact Durango Manufacturing Company's ability to achieve the desired 10% growth in revenue.
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