Ying Limited Acquires the Net Assets of Yang Limited for a Cash

question 5

Multiple Choice

Ying Limited acquires the net assets of Yang Limited for a cash consideration of $50 000. One half is to be paid on acquisition date and one half is payable in one year's time. The appropriate discount rate is 5% p.a. The present value of the cash outflow in one year's time is:

• A) $23 810.
• B) $25 000.
• C) $26 190.
• D) $30 000.

Calculate and differentiate between marginal and average tax rates under various tax structures.

Identify qualifying conditions for health care insurance coverage exemptions.

Understand employer and employee responsibilities in tax reporting.

Recognize primary and secondary sources of tax authority.

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Definitions:

Optimal-output

The level of production that maximizes a firm's profit, where marginal cost equals marginal revenue.

Break-even

The point at which cost or expenses and revenue are equal, resulting in neither profit nor loss.

Long-run Equilibrium

A state in which all factors of production and costs are variable, and firms are making neither excess profits nor losses.

Short-run Equilibrium

Short-run Equilibrium occurs in a market when the quantity supplied equals the quantity demanded at a specific price level, without considering changes in the long run.