Backdating is granting options shortly before good news causes a share price rise.

Stan Todd, Inc. wants to manufacture a new cell phone that can be worn on the wrist. Information from doing market research shows that he can sell this phone for $25 each

His fixed costs would be $145,000 a year and variable costs would amount to $10 per phone. (1) What would the contribution margin ratio be? (2) What sales volume in units would Stan need to break-even? (3) What sales volume in units would Stan need to earn $200,000 profit? (4) What would be the margin of safety if he sold 25,000 units (use the information calculated in #2)? What will be an ideal response?

Roger is considering making a $6,000 investment in a venture that its promoter promises will generate immediate tax benefits for him. Roger, who does not anticipate itemizing his deductions, is in the 30% marginal income tax bracket. If the investment is of a type that produces a tax credit of 40% of the amount of the expenditure, by how much will Roger's tax liability decline because of the

investment? a. $0 b. $1,800 c. $2,200 d. $2,400 e. None of the above