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Question - Assume that Clark, Eric and Emily form another entity, DNA Solutions Inc. that will operate as a partnership. Emily contributes $50,000 in cash for her 10% interest in the entity, Eric contributes land with an adjusted basis of $50,000 and a FMV of $200,000 and cash of $25,000 for his 45% interest and Clark contributes equipment with an adjusted basis of $100,000 and a FMV of $200,000 and cash of $25,000 for his 45% interest. DNA Solutions also borrowed a $200,000 of recourse loan from a bank to finance their initial operations. Assuming that each partner's interest represents the partner's interest in profits and losses, what are Emily, Eric and Clark's basis in DNA Solutions Inc.?
Find the contribution margin per haircut. Assume that the barbers' compensation is a fixed cost. Show calculations to support your answer.
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