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Patriot Industries recently sold its fin fabrication machine for $150,000. The machine originally cost $500,000 and has a current book value of $100,000. Patriot's marginal tax rate is 35 percent for ordinary income and 35 percent for capital gains income.
a. What amount of gain has Patriot received from this transaction?
b. Is this a capital or ordinary gain?
c. How much tax must Patriot pay on this transaction?
Collect and evaluate the data about stock performance of PepsiCo for the last one year. Compare the results that you received against the industry or main competitor (Coca-cola Company).
In the lease versus buy decision, leasing is often preferable
The wet corp has an investment project that will reduce expenses by $25,000 per year for three years. The project's cost is $55,000. If the asset is part of the three-year MACRS category (33% first year depreciation) and the company's tax rate is 34%..
Acme Corporation has a bond issue on the market that matures in 19 years, each bond has a $1,000.00 par value and pays an annual coupon. The bonds currently sell for a price of $1,213 each. If the market rate (yield to maturity) on this issue is 9% w..
The price of gold is currently $1,000 per ounce. The forward price for delivery in 1 year is $1,200. An arbitrageur can borrow money at 10% per annum. What should the arbitrageur do? Assume that the cost of storing gold is zero and that gold provides..
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A large forest industry company Pinewood is considering buying a smaller company White River which has two pulp mills and a significant forest area. What kind of valuation methods should Pinewood apply when determining its purchase price offer to the..
The current market price of Canadian Fire Sale Corp. equity is $30 per share. Analysts estimate that Canadian Fire Sale will report earnings-per-share (EPS1) of $2.50 in one year. The required return on Canadian Fire Sale shares is 10 percent. Calcul..
Rico needs approximately ?$2,700 to buy a new computer. A? two-year unsecured loan through the credit union is available for 12.50 percent interest. The current rate on his revolving home equity line is 9.25 ?percent, although he is reluctant to use ..
What is the difference between required reserves and excess reserves? What is the definition of the required reserve ratio?
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