On November 1 of year 0, Jaxon borrowed $34,000 from Bucksnort Savings and Loan for use in his business. In December, Jaxon paid interest of $3,060 relating to the 12-month period from November of year 0 through October of year 1 How much interest, if any, can Jaxon deduct in year 0 if his business uses the cash method of accounting for tax purposes?

Lynch company manufactures and sells a single product. the following costs were incurred during the company’s first year of operations: variable costs per unit: manufacturing: direct materials $ 12 direct labor $ 6 variable manufacturing overhead $ 1 variable selling and administrative $ 1 fixed costs per year: fixed manufacturing overhead $ 308,000 fixed selling and administrative $ 218,000 during the year, the company produced 28,000 units and sold 15,000 units. the selling price of the company’s product is $56 per unit. required: 1. assume that the company uses absorption costing: a. compute the unit product cost. b. prepare an income statement for the year. 2. assume that the company uses variable costing: a. compute the unit product cost. b. prepare an income statement for the year.

Examine the following book-value balance sheet for university products inc. the preferred stock currently sells for $30 per share and pays a dividend of $3 a share. the common stock sells for $16 per share and has a beta of 0.9. there are 2 million common shares outstanding. the market risk premium is 9%, the risk-free rate is 5%, and the firm’s tax rate is 40%. book-value balance sheet (figures in $ millions) assets liabilities and net worth cash and short-term securities $ 2.0 bonds, coupon = 6%, paid annually (maturity = 10 years, current yield to maturity = 8%) $ 5.0 accounts receivable 3.0 preferred stock (par value $15 per share) 3.0 inventories 7.0 common stock (par value $0.20) 0.4 plant and equipment 21.0 additional paid-in stockholders’ equity 13.6 retained earnings 11.0 total $ 33.0 total $ 33.0 a. what is the market debt-to-value ratio of the firm? (do not round intermediate calculations. enter your answer as a percent rounded to 2 decimal places.) b. what is university’s wacc? (do not round intermediate calculations. enter your answer as a percent rounded to 2 decimal places.)

Many potential buyers value high-quality used cars at the full-information market price of € p1 and lemons at € p2. a limited number of potential sellers value high-quality cars at € v1 ≤ p1 and lemons at € v2 ≤ p2. everyone is risk neutral. the share of lemons among all the used cars that might be potentially sold is € θ . suppose that the buyers incur a transaction cost of $200 to purchase a car. this transaction cost is the value of their time to find a car. what is the equilibrium? is it possible that no cars are sold