Question
______ 1. One of the best ways to reduce agency conflict is by a.instituting severe penalties for bad decisions. b.hiring outside monitors to keep track
______ 1. One of the best ways to reduce agency conflict is by
a.instituting severe penalties for bad decisions.
b.hiring outside monitors to keep track of the manager's decisions.
c.designing an effective compensation package.
d.having managers report to the board of directors.
______ 2. Assume the pre-tax profit of $50,000 has been earned by a business, and the owner/proprietor wants to withdraw all of the after-tax profit for personal use. Assume the tax rate for a C corporation is 34%, while the rate for a person is 27%. The after-tax earnings available under the corporate and proprietorship forms of business are:
a.for a corporation, $24,090; for a proprietorship, $36,500.
b.for a corporation, $25,125; for a proprietorship, $37,500.
c.for either a corporation or a proprietorship, $36,500.
d.for either a corporation or a proprietorship, $24,090.
______ 4. The Millennium Chemical Corporation announced that for the period ending December 31, 2015, it earned income after taxes of $2,768,028 on revenues of $13,144,680. The companys costs (excluding depreciation and amortization) amounted to 61% of revenues, and Centennial
had interest expenses of $392,168. What is the firms depreciation and amortization expense if
its tax rate was 30 percent?
a.$ 540,275
b.$ 486,290
c.$ 958,083
d.$ 779,931
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