Brandon, an individual, began business four years ago and has never sold a §1231 asset. Brandon owned each of the assets for several years. In the current year, Brandon sold the following business assets:

Asset Original Cost Accumulated Depreciation Gain/Loss
Machinery $30,000 $7,000 $10,000
Computers 10,000 6,000 (2,000)
Building 90,000 20,000 (2,000 )

Assuming Brandon's marginal ordinary income tax rate is 32 percent, what effect do the gains and losses have on Brandon's tax liability?

a. $7,000 ordinary income, $1,000 §1231 loss and $2,100 tax liability.
b. $6,000 ordinary income and $2,100 tax liability.
c. $7,000 §1231 gain and $2,450 tax liability.
d. $7,000 §1231 gain and $1,050 tax liability.
e. None of these.

If a firm plans to issue new stock, flotation costs (investment bankers' fees) should not be ignored. there are two approaches to use to account for flotation costs. the first approach is to add the sum of flotation costs for the debt, preferred, and common stock and add them to the initial investment cost. because the investment cost is increased, the project's expected return is reduced so it may not meet the firm's hurdle rate for acceptance of the project. the second approach involves adjusting the cost of common equity as follows: . the difference between the flotation-adjusted cost of equity and the cost of equity calculated without the flotation adjustment represents the flotation cost adjustment. quantitative problem: barton industries expects next year's annual dividend, d1, to be $1.90 and it expects dividends to grow at a constant rate g = 4.3%. the firm's current common stock price, p0, is $22.00. if it needs to issue new common stock, the firm will encounter a 6% flotation cost, f. assume that the cost of equity calculated without the flotation adjustment is 12% and the cost of old common equity is 11.5%. what is the flotation cost adjustment that must be added to its cost of retaine

The 39 percent and 38 percent tax rates both represent what is called a tax "bubble." suppose the government wanted to lower the upper threshold of the 39 percent marginal tax bracket from $335,000 to $208,000. what would the new 39 percent bubble rate have to be? (do not round intermediate calculations. enter your answer as a percent rounded to 2 decimal places,e.g., 32.16.)

Robin hood has hired you as his new strategic consultant to him successfully transform his social change enterprise. robin has told you that he counting on your strategic management knowledge to him and his merrymen achieve their goals. discuss in detail what you think should be robin’s two primary strategic goals and continue by also explaining your analytical reasons that support your recommendations.