You have a 24% interest in a Limited Partnership. The partnership produces $400,000 in profits this year. You also own 30% of the shares in a Corporation. It produces $400,000 in pre-tax profits this year. Its tax rate is 20% and its payout ratio is 100%. You are in the 33% tax bracket. Which of your two investments produces more income for you?
a) the limited partnership
b) the corporation
c) the same
d) need to know the total number of shares in the corporation
Ans: c) the same
Business
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In a sale-leaseback transaction, if the lease includes a bargain purchase option, the seller-lessee accounts for the transaction as a sale, the lease as a capital lease, and amortizes the profit from the sale over the lease term.
a. true b. false
Business
Explain the time value of money. Incorporate terms such as discount rate and present value
What will be an ideal response?
Business