Jerry and Matt Decide to Form a Business

question 87

Multiple Choice

Jerry and Matt decide to form a business. Jerry will contribute $4,200 for a 35% interest and Matt will contribute $7,800 for a 65% interest. The business will take out a $25,000 loan to cover the balance of their working capital needs. They expect that the business will have a loss of $38,000 for the first year. In the second year, the business will have a profit of $52,000 and it will distribute $5,200 to Matt and $2,800 to Jerry. Jerry is in the 32% marginal tax bracket and Matt is in the 24% marginal tax bracket. Their marginal tax brackets will not change as a result of profit or loss from this business. What is Matt's basis at the end of the second year if they organize the business as a partnership?

• A) $0
• B) $11,700
• C) $27,950
• D) $28,600
• E) $33,800

Understand the impact of social shopping and online shopping tools on consumer knowledge and behavior.

Distinguish between different types of shopping motives and shopping orientations.

Understand strategies for managing customer expectations and responses in retail.

Understand the role and impact of salespeople in consumer interactions.

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Definitions:

Crisis Communication

A specialized area of public relations designed to protect and defend an individual, company, or organization facing a public challenge to its reputation.

Crisis Communication

The effort by a business or organization to communicate effectively during unexpected events that threaten to harm its reputation or stakeholders.

Issues Management

The systematic identification, evaluation, and handling of any issue that could impact an organization’s ability to achieve its objectives, often involving preventive public relations strategies.

Social Media

Digital platforms that enable users to create and share content or participate in social networking.