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?

Nahshid and Senim own competing businesses and have agreed to collude to keep prices high. They both plan on being in business indefinitely (so this is an infinitely repeated game.) IF they collude, Nahshid gets a payoff of $120 now and $120 in every year going forward. But if Nahshid "cheats" he gets a one-time payoff of $130 now. Senim responds with a trigger strategy which means that Nahshid only gets $118 for every year after this. What does the interest rate have to be in order for Nahshid to continue colluding and not cheat? Select one: O a. Interest rate must be greater than or equal to 0.1, or 10%, to sustain collusion. O b. Interest rate must be less than or equal to 0.1, or 10%, to sustain collusion. O c. Interest rate must be greater than or equal to 0.2, or 20%, to sustain collusion. O d. Interest rate must be less than or equal to 0.2, or 20%, to sustain collusion.

Jessica is a professional consultant. She agrees to consulting services for Joe for $2,000. After she finishes, Joe does not have cash to pay Jessica, but he has an antique, collectible baseball card with a fair market value of $2,000 that he gives her to satisfy the payment. The baseball card cost Joe $500. How much should Jessica include in her gross income?

Alice, Betty and Carol are equal owners of ABC, Inc. They believe that ABC is worth about $3,000,000 today. They think that the value of ABC will increase by about 5% to 10% per year. Each of them has a basis in their stock of $500,000. ABC is very profitable. Each of them draw an annual salary of $250,000. They agree that if any one of them dies, they do not want anyone else to be the owner of the decedent’s stock. Explain which method you recommend they use and why. ( a stock redemption buy-sell agreement or a cross-purchase buy-sell agreement )

[The following information applies to the questions displayed below.]Tonya Jefferson (single), a sole proprietor, runs a successful lobbying business in Washington, DC. She doesn't sell many business assets, but she is planning on retiring and selling her historic townhouse, from which she runs her business, to buy a place somewhere sunny and warm. Tonya's townhouse is worth $1,000,000 and the land is worth another $1,000,000. The original basis in the townhouse was $600,000, and she has claimed $250,000 of depreciation deductions against the asset over the years. The original basis in the land was $500,000. Tonya has located a buyer that would like to finalize the transaction in December of the current year. Tonya's marginal ordinary income tax rate is 35 percent, and her capital gains tax rate is 20 percent.   b. In addition to the original facts, assume that Tonya reports the following nonrecaptured net §1231 loss:   Year Net §1231 Gains/(Losses) Year 1 $ (200,000) Year…

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?

Michael has decided to retire from his business and pass the business on to his oldest child, Taylor. He does not want the value of his shares to grow over time. Michael’s shares have an ACB and PUC of $200 and a FMV of $300,000. He plans to use an estate freeze using Section 86. If Michael plans only to take shares as consideration for the exchange, describe the shares that he’ll take as exactly as you can. The type of shares, what happens to their value over time, their attributes such as ACB/PUC/FMV.

Jagdeep sold his Indian restaurant “Maya no Dhaba” to Jasleen for the amount of $450,000. On top of that, Jasleen paid another $50,000 for Jagdeep to agreed that he won’t open a new Indian restaurant in the radius of 10 Kms for the next five years.Discuss whether the $50,000 payment is considered as Ordinary Income?

| 1. After defeating the Dark Lord, Ron's brother offers him a job at Weasleys' Wizard Wheezes. If Ron takes this job, his annual income will be 1 million galleons. Alternatively, Ron can return to Hogwarts to finish school, but then he must give up the job with his brother. Graduating will take him a year and it will cost 10,000 galleons in direct costs. He knows for sure he can become an Auror after finishing his education, at a yearly salary of 800,000 galleons. He thinks that the probability that he becomes Minister of Magic 25 years after graduating (at Year 27) is 25%, and the minister's salary is 10 million galleons per year. Regardless of his choice, he wants to retire in 30 years from now (at Year 30). Assume the interest rate is 5%. Assume all payments are at the beginning of the year and all wages are paid at the beginning of the year. a. If Ron is only concerned with the monetary rewards, will he go back to Hogwarts? If you are using equations, write down the appropriate…

Aminah owns 1,000 shares of a firm that has just announced an increase in its dividend from $2.00 to $2.50 a share. The share price is currently $150. If Aminah does not wish to spend the extra cash, what should he do to offset the dividend increase?