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- Assume that A values his house at $90,000. B is willing to pay $110,000 for A’s house in order torelocate closer to work. After signing a contract, B’s employer announces that the company will moveto another city. In view of this fact, the value of the house to B is reduced to $75,000. From anefficiency viewpoint, who should own the house, A or B?How will the parties achieve efficiency in allocating the house if the court enforces the contract?A couple is about to get married. They decide to start a joint bank account to save for a house. They want to have an initial investment of $9,000. The first partner contributes $350 more than three-quarters of what the second partner contributes. How much does each partner contribute? Select one: a. P1 = $4,557.14, P2= $4,442.86 b. P1= $3,557.14, P2= $5,452.86 c. P1= $4,057.14, P2= $4,942.86 d. P1 = $5,057.14, P2= $3,942.86 e. P1= $5,857.14, P2 $3,992.86 W2) Jim and Carol both work in the real estate market. One day, a great investment property came on the market, and they decided to pool their money to buy and renovate it. They plan to spend six weeks on the renovation, and they hope to make a nice profit when they turn around and sell it. Jim and Carol's partnership is an example of A) a limited partnership. B) a cooperative. C) an S corporation. D) a limited liability company. E) a joint venture.
- Sam Jones, Mary Adams, and Larry Brown have been talking about startingtheir own business for several years. Sam is an electronic repairman, Mary isa partner in a large law firm, and Larry is an excellent salesperson. Sam andLarry will work in the business on an equal basis. It costs $100,000 to startthis business. Sam has no money, Mary has $60,000, and Larry has $40,000.If they form a partnership, how would you recommend that they organize?Michiko and Saul are planning to attend the same university next year. The university estimates tuition, books, fees, and living costs to be 12,000 per year. Michikos father has agreed to give her the 12,000 she needs to attend the university. Saul has obtained a job at the university that will pay him 14,000 per year. After discussing their respective arrangements, Michiko figures that Saul will be better off than she will. What, if anything, is wrong with Michikos thinking?Three friends are starting a home painting business while they are in college. One of the friends is from a wealthy family and will finance the startup costs – website development, advertising and purchasing the paint, in return for a 50% share of the business. The other two friends will each own 25% of the business. They may have two or three employees who will be paid by the job and will not own any of the business. They expect to distribute to themselves all the earnings of the business every month. Once they graduate from college, they expect to leave the business and have their brothers and sisters take over. They have no plans to grow the business beyond one or two projects at a time. Which form of ownership should they use as they start up this business?
- Mickey and Minnie live in Orlando. Mickey’s net present value of lifetime earnings in Orlando is $125,000, while Minnie’s is $500,000. The cost of moving to Atlanta is $25,000 per person. In Atlanta, Mickey’s net present value of lifetime earnings would be $155,000, while Minnie’s would be $510,000. If Mickey and Minnie choose where to live based on their joint well-being, will they move to Atlanta? Is Mickey a tied mover or a tied stayer or neither? Is Minnie a tied mover or a tied stayer or neither?Joe, June, and Jim—coworkers—decide that they want to start their own business. Joe has $200,000 to contribute, June has equipment valued at $100,000 (basis = $90,000), and Jim has real estate suitable for the business valued at $200,000 (basis = $110,000). Joe and Jim are each to receive 40 percent of the corporate stock, and June is to receive 20 percent. Joe and June transfer title to their property to the corporation immediately. When Jim tries to transfer title to the real estate to the corporation, several legal errors in the title are discovered, and he is unable to transfer title until the errors are corrected. Correcting the errors takes more than 14 months. In the meantime, the corporation begins operating, renting the building from Jim. In the 15th month, Jim is able to transfer title and receive his stock. Is Jim eligible to use the nonrecognition provisions of Section 351 on this transfer?James and Laura are forming a partnership. James will invest a truck with a book value of $10,000 and a fair market value of $14,000. Laura will invest a building with a book value of $30,000 and a fair market value of $42,000 with a mortgage of $15,000. Answer the following questions: 1- At what amount should the building be recorded? 2- What amount should be recorded in Laura's capital account? 3- What amount should be recorded in James' capital account? Essay Toolbar navigation BI U S A
- Yash and Ankita decided to invest money in this joint venture, which they called Alkaline. Both of them invested *1,50,000 each in the company on 1st April. After the investment, they used the money from the company to buy a website domain name on the internet for alkaline.com from GoDaddy.com on 3rd April. This cost them 3,000. Since they both decided to work from home, there was no point in renting out an office space just yet. However, the production of beauty products would require a factory of sorts. Since they were just starting out, they rented half a floor of an already operating factory on the 5th of April for ₹16,000 per month from Mr Bhuvan. Their next order of business was to procure raw materials to manufacture the beauty products. They drove across town and met various vendors to get the cheapest deal available. Because they did not want to get all their raw materials from different places, they compromised on the price a little and bought all the raw materials from one…Ahmed for Mujeeb Leasing for several years. Muscat Leasing is a company that leases high-tech medical equipment to hospitals. Ahmed for Mujeeb have decided that, with their financial expertise, they might start their own company to provide consulting services to individuals interested in leasing equipment. One form of organization they are considering is a partnership. If they start a partnership, each individual plan to contribute OMR50,000 in cash. In addition, Ahmed has a used computer that originally cost OMR370, which he intends to invest in the partnership. The computer has a present market value of OMR150.Although both Ahmed for Mujeeb are financial wizards, they do not know a great deal about how a partnership operates. As a result, they have come to you for advice. What type of document is needed for a partnership, and what should this document contain?Mario and Luigi each own half of a mushroom pizza parlor. They want to expand by purchasing a second brick oven for $30,000. They give Koopa Fund a 10% stake in the pizza parlor in exchange for the necessary capital. From this, we can infer that Luigi must have valued his stake in the business to be worth no more than x. What is x?