Tour Vista,an Online Travel Company,buys Blocks of Rooms from Skyview

question 3

Multiple Choice

Tour Vista,an online travel company,buys blocks of rooms from Skyview Towers,a hotel in River City,at a wholesale rate.Tour Vista reslls the rooms to consumers at a retail rate.In recent efforts to collect taxes from e-commerce,some cities claim that hotel occupancy taxes should be assessed and remitted directly to the cities based on

• A)the dire financial straits of the cities during the latest recession.
• B)the retail rates of the rooms.
• C)the states of residency of the consumers who reserve the rooms.
• D)the wholesale rates of the rooms.

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Definitions:

Lease Residual Value

The estimated value of a leased asset at the end of the lease term.

Loss on Sale

Occurs when the sale price of an asset is less than its carrying amount on the books.

Treasury Shares

Stocks that the original issuing company repurchased, subsequently decreasing the quantity of available shares in the market.