Answer:
unscrupulous people to take part in the underground economy.
Explanation:
Taxes are levies that a government collects from individuals and businesses. It is compulsory and is used to raise revenue from services, goods, or income.
When income earned by labour is taxed it reduces the the moral of employees to work and earn legally.
Some may now turn to the underground economy to earn more money.
The underground economy is made up of illegal activities that fail to meet reporting standards of the government. That is either transactions are made on goods that are illegal or income earned is not subject to government taxation.
The assets and liabilities of a company are $86,600 and $44,499, respectively. Stockholders' equity should equal a.$44,499 b.$131,099 c.$86,600 d.$42,101
Answer:
d.$42,101
Explanation:
We use the accounting equation to determine the Equity Balance
Accounting Equation States :
Assets = Equity + Liabilities
also,
Equity = Assets - Liabilities
therefore,
Equity = $86,600 - $44,499 = $42,101
thus
Stockholders' equity should equal $42,101
Hart, an individual, bought an asset for $500,000 and has claimed $100,000 of depreciation deductions against the asset. Hart has a marginal tax rate of 32 percent.
a1. What is the amount and character of Hart's recognized gain or loss if the asset is tangible personal property sold for $550,000?
a2. Due to this sale, what tax effect does Hart have for the year?
Answer and Explanation:
The computation is shown below:
a. The amount and the character of the gain or loss is
Sale value of the property $550,000
Less: (Purchase value - depreciation) $400,000
Total gain recognized $150,000
Ordinary income recapture is $100,000
remaining 1231 gain or loss $50,000
b.
Section 1231 Gain = $50,000
, Rate of tax on $100,000 i.e. 32% = $32000
Rate of tax on $50000 i.e. 15% = $7500
So,
The Total tax liability is
= $32,000 + $7,500
= $39,500
Sally has a credit card balance of $500 . The credit card company charges a nominal interest rate of 16 percent a year on unpaid balances. The inflation rate is 5 percent a year. Calculate the real interest rate that Sally pays the credit card company.
Answer:
10.48%
Explanation:
Real interest rate = (1 + nominal interest rate) / (1 + inflation rate) - 1
1.16/1.05 - 1 = 10.48
Nominal interest rate is real interest rate plus inflation rate
Real interest rate is interest rate that has been adjusted for inflation
Lesco's is evaluating a project that has a different level of risk than the overall firm. This project should be evaluated: Group of answer choices
Answer:
3. using a beta commensurate with the project's risks.
Explanation:
In the case when the project is evaluated so there is the different type of the risk instead of the total firm so here the project should be evaluated via beta commensurate alonhg with the risk of the project. As each and very project has the different level of risk also there is a different between the beta as if we compared to the beta of the market, beta of the firm etc
Hence, the above represent the answer
Projected free cash flows should be discounted at the firm's weighted average cost of capital to find the value of its operations. True False
Answer:
True
Explanation:
Projected free cash flows should be discounted at the firm's weighted average cost of capital to find the value of its operations.
Free Cash flow is refereed to all cash available for distributions after all obligations are taken into account.
So free cash flow from the planning period and representative period should be discounted back using firm's weighted average cost of capital to find the value of its operations.
Henry has a defined benefit plan that promises an annual retirement benefit based on 2% of his final 5-year average annual salary for each year of service. At retirement, Henry has 21 years of service and had an average salary of $95,000 over the last 5 years. His annual benefit will be:_______a. $15,200. b. $95,000. c. $60,500. d. $49,875. e. $39,900.
Answer: e. $39,900
Explanation:
Henry's defined benefit can be calculated by the formula:
= Average salary over the last 5 years * Years of service at retirement * annual retirement benefit percentage based on 5 year average salary
= 95,000 * 21 * 2%
= $39,900
Metlock, Inc. uses a periodic inventory system. Details for the inventory account for the month of January 2017 are as follows: Units Per unit price Total Balance, 1/1/2017 270 $5.0 $1350 Purchase, 1/15/2017 140 ..5 672 Purchase, 1/28/2017 140 ..5 700 An end of the month (1/31/2017) inventory showed that 220 units were on hand. How many units did the company sell during January 2017?
Answer:
330 units
Explanation:
Particulars Units
Opening 270 Units
Add: Purchases 140 Units
Add :Purchases 140 Units
Total 550 Units
Less: Closing 220 Units
Sales 330 Units
So, the total units the company sold during January 2017 is 330 units.
1. Prepare general journal entries to record the transactions above for Spade Company by using the following accounts: Cash; Accounts Receivable; Office Supplies; Office Equipment; Accounts Payable; Common Stock; Dividends; Fees Earned; and Rent Expense. 2. Post the above journal entries to T-accounts, which serve as the general ledger for this assignmen
Question Completion:
The transactions of Spade Company appear below. a. Kacy Spade, owner, invested $18,750 cash in the company in exchange for common stock. b. The company purchased office supplies for $544 cash. c. The company purchased $10,369 of office equipment on credit. d. The company received $2,212 cash as fees for services provided to a customer. e. The company paid $10,369 cash to settle the payable for the office equipment purchased in transaction c. f. The company billed a customer $3,975 as fees for services provided. g. The company paid $530 cash for the monthly rent. h. The company collected $1,670 cash as partial payment for the account receivable created in transaction f. i. The company paid $1,000 cash in dividends to the owner (sole shareholder).
Answer:
Spade Company
General Journal Entries:
a. Debit Cash $18,750
Credit Common stock $18,750
To record cash contributed in exchange of common stock.
b. Debit Office supplies $544
Credit Cash $544
To record the purchase of office supplies.
c. Debit Office Equipment $10,369
Credit Accounts Payable $10,369
To record the purchase of office equipment on account.
d. Debit Cash $2,212
Credit Fees Earned $2,212
To record the receipt of cash for earned fees.
e. Debit Accounts Payable $10,369
Credit Cash $10,369
To record the payment for office equipment.
f. Debit Accounts Receivable $3,975
Credit Fees Earned $3,975
To record the supply of services on account.
g. Debit Rent Expense $530
Credit Cash $530
To record payment for monthly rent.
h. Debit Cash $1,670
Credit Account receivable $1,670
To record the receipt of cash on account.
i. Debit Dividends $1,000
Credit Cash $1,000
To record the payment of cash dividend.
2. T-accounts:
Cash
Account Title Debit Credit
Common stock $18,750
Office supplies $544
Fees Earned 2,212
Accounts Payable 10,369
Rent Expense 530
Account receivable 1,670
Dividends 1,000
Accounts receivable
Account Title Debit Credit
Fees Earned $3,975
Cash $1,670
Office Supplies
Account Title Debit Credit
Cash $544
Office Equipment
Account Title Debit Credit
Accounts Payable $10,369
Common Stock
Account Title Debit Credit
Cash $18,750
Accounts Payable
Account Title Debit Credit
Office Equipment $10,369
Cash $10,369
Fees Earned
Account Title Debit Credit
Cash $2,212
Accounts Receivable 3,975
Rent Expense
Account Title Debit Credit
Cash $530
Dividends
Account Title Debit Credit
Cash $1,000
Explanation:
a) Data and Analysis:
a. Cash $18,750 Common stock $18,750
b. Office supplies $544 Cash $544
c. Office Equipment $10,369 Accounts Payable $10,369
d. Cash $2,212 Fees Earned $2,212
e. Accounts Payable $10,369 Cash $10,369
f. Accounts Receivable $3,975 Fees Earned $3,975
g. Rent Expense $530 Cash $530
h. Cash $1,670 Account receivable $1,670
i. Dividends $1,000 Cash $1,000
Sheffield Co. had retained earnings of $19900 on the balance sheet but disclosed in the footnotes that $2800 of retained earnings was restricted for building expansion and $800 was restricted for bond repayments. Cash of $2200 had been set aside for the plant expansion. How much of retained earnings is available for dividends?a. $12,000.b. $13,000.c. $15,000.d. $10,000.
Answer:
$16,300
Explanation:
Calculation to determine How much of retained earnings is available for dividends
Using this formula
Retained earnings=Retained earnings - Retained earnings for restricted plant expansion - Restricted for bond repayments
Let plug in the formula
Retained earnings= $19,900 - $2,800 - $800
Retained earnings= $16,300
Therefore the amount of retained earnings that is available for dividends is $16,300
Tony's marginal income tax rate is 24%, and he pays FICA tax on his entire salary (7.65%). Tony's employer offered him a choice between $5,000 additional salary or a nontaxable fringe benefit. Tony would have to pay $3,600 to purchase the benefit directly. Which of the following statements is true? (answers rounded to the nearest whole dollar)A. The fringe benefit and the additional salary have the same after-tax value.B. The fringe benefit is worth $83 more than the additional salary.C. The additional salary is worth $300 more than the fringe benefit.D. None of the above is true.
Answer: The fringe benefit is worth $182 more than the additional salary.
Explanation:
The Fringe benefit is valued at $3,600.
The additional salary after taxes is:
= 5,000 - (5,000 * 24%) - (5,000 * 7.65%)
= 5,000 - 1,200 - 382.5
= $3,418
The Fringe benefit is worth more than the salary by:
= 3,600 - 3,418
= $182
Options are more probably for a variant of this question.
why is price discrimination not possible under perfect market conditions
Price discrimination is not possible under perfect market conditions due to availability of many firms in the market which restrict to capture of the market.
What is Price discrimination?Price discrimination is a technique to maximize the profit of the organization. In price discrimination, a similar product will be sold in different markets, in this case, the consumer will move to the lowest price or either with the quality and tries to negotiate.
In perfect market competition, there is a large number of firms are available so sellers can not discriminate the prices of products and services as many options or alternatives are available to Buyers who sell similar products.
This market structure provides easy entry and exit to the market as they are having no barriers due to having the least competition.
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The accountant for TI Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: Retained earnings balance at the beginning of the year $163,000 Cash dividends declared for the year 50,800 Net income for the year 98,000 What is the ending balance for retained earnings?a. $261,000.
b. $14,200.
c. $210,200.
d. $282,000.
e. $112,200.
Answer:
$210,200
Explanation:
The retained earning at the beginning of the year is $163,000
The cash dividend is $50,800
The net income is $98,000
Therefore the ending balance for retained earning can be calculated as follows
= 163,000+98,000-50,800
= 261,000-50800
= 210,200
Hence the ending balance for retainerd earnings is $210,200
When they act as a profit-maximizing cartel, the total industry profit in the flowers market is per day. Suppose the flowers each company produces are regarded as perfect substitutes, such that if either company charged a price lower than the other, that company would receive all the business and profits in the industry. If both firms attempt to undercut each other, however, the result would be pricing at marginal cost and zero profit for both firms. The two firms intend to operate together in this market indefinitely, and at the beginning of each day, both firms individually choose whether to continue charging the collusive price. A firm that undercuts in a given month will receive (almost) the entire monopoly profit in that period, but no profit in any future periods. If the probability that both firms will continue operating and charging the collusive price in the next period is 0.60, then the expected stream of profits for one firm in the collusive equilibrium is . Tacit collusion is therefore in this scenario. Suppose a third firm with the exact same costs and similarly substitutable flowers enters the market. If this firm joins the cartel, the expected stream of profits for an individual firm is now (again assuming a probability of 0.60 that production occurs in the next period). In this case, a tacit collusive agreement is
Answer:
Total industry profit is $32 per day.
Tacit collusion is better in this situation
Expected profit in collusive equilibrium is $23.7
Tacit collusive agreement is not beneficial.
Explanation:
When the firms do not collude the total industry profit is $32 per day whereas if the firms collude the profits will decline to $23. This clearly shows that tacit collusion agreement is not beneficial for both the firms.
On December 31, 2021, Larry's Used Cars had balances in Accounts Receivable and Allowance for Uncollectible Accounts of $67,000 and $1,075, respectively. During 2022, Larry's wrote off $2,200 in accounts receivable and determined that there should be an allowance for uncollectible accounts of $5,300 at December 31, 2022. Bad debt expense for 2022 would be
Answer:
$6,425
Explanation:
The computation of the bad debt expense for the year 2022 is given below;
Given that
Beginning allowance for uncollectible accounts = $1,075
Accounts written-off = $2,200
Now
Unadjusted balance of allowance for uncollectible accounts is
= Beginning allowance for uncollectible accounts - Accounts written-off
= $1,075 - $2,200
= -$1,125
And, the Ending balance of allowance for uncollectible accounts is $5,300
So,
Bad debt expense is
= Ending balance of allowance for uncollectible accounts - Unadjusted balance of allowance for uncollectible accounts
= $5,300 - (-$1,125)
= $6,425
The main disadvantage of an emissions tax is that :______.a) the total pollution reduction from an emissions tax cannot be known for sure. b) firms lack the flexibility to pursue different technologies. c) firms do not have an incentive to reduce pollution. d) firms cannot behave in an economically-efficient manner. e) differences among firms are not incorporated into the policy.
Answer:
.a) the total pollution reduction from an emissions tax cannot be known for sure.
Explanation:
The broad form of taxes by government on greenhouse gases , these is
✓an emissions tax: this tax is been put on the company due to the quantity that is been produced by entity. This emmision tax is imposed as a result of green house effect gas that is been produced during operation of companies example of this carbon tax, since the effect of the green house is felt in weather events, this tax is on goods or services which is known to be greenhouse gas-intensive, for instance carbon tax on gasoline. It should be noted that the main disadvantage of an emissions tax is that the total pollution reduction from an emissions tax cannot be known for sure.
The GDP price index in the United States in 2016 was about 106 , and real GDP in 2016 was $17.7 trillion (2012 dollars). The GDP price index in the United States in 2018 was about 110 , and real GDP in 2018 was $18.6 trillion (2012 dollars). Calculate nominal GDP in 2016 and in 2018 and the percentage increase in nominal GDP between 2016 and 2018 .
Answer:
9.05%
Explanation:
in nominal dollars, the 2016 GDP was $17.7 trillion x 1.06 = $18.762 trillion
in nominal dollars, the 2018 GDP was $18.6 trillion x 1.1 = $20.46 trillion
the percentage increased in nominal GDP between 2016 and 2018 was ($20.46 trillion - $18.762 trillion) / $18.762 trillion = 0.0905 ≈ 9.05%
A firm has expected EBIT of $910, debt with a face and market value of $2,000 paying an 8.5% annual coupon, and an unlevered cost of capital of 12%. If the tax rate is 21%, what is the value of the equity
Answer: $4410
Explanation:
Firstly, the value of the levered firm will be:
= EBT( 1- Tax) / Unlevered cost of capital + Debt Value ( Tax Rate)
= 910(1 - 21%) / 12% + 2000(21%)
= 910( 1 - 0.21)/0.12 + 2000(0.21)
= 5990 + 420
= 6410
Then, the value of equity will be:
= VAlue of Firm - Value of Debt
= $6410 - $2000
= $4410
The capital budgeting committee of the Caldwell Pipe Corporation is evaluating the possibility of replacing its old pipe-bending machine with a more advanced model. Information on the existing machine and the new model follows: Existing machine New machine Original cost $200,000 $400,000 Market value now 80,000 Market value in year 5 0 20,000 Annual cash operating costs 40,000 10,000 Remaining life 5 yrs 5 yrs Refer to Caldwell Pipe Corporation. If the company buys the new machine and disposes of the existing machine, corporate profit over the five-year life of the new machine will be ________ than the profit that would have been generated had the existing machine been retained for five years. Select one: a. $230,000 lower b. $150,000 lower c. $150,000 higher d. $170,000 lower
Answer:
c. $150,000 higher
Explanation:
Operating cost of old machine = $40,000 per year
For 5 years, $40,000*5 years = $200,000
Operating cost of new machine = $10,000 per year
For 5 years, $10,000*5 = $50,000
Operating cost of new machine ($50,000) < ($200,000) Operating cost of the old machine. Thus, this will have a positive effect of $150,000 ($200,000-$50,000) on the corporate profit.
Which of the following is an example of investment? A. a person depositing $ 100 a week to her savings account B. a person's annual medical checkup C. the purchase of new buses by Greyhound D. a student increasing his human capital by attending college
Answer:
C. the purchase of new buses by Greyhound
Explanation:
The investment is the amount that should be invested in order to generate the income
So as per the given situation,the option C is correct as if we puchase the new buses so there is a big investment but after investing into it it generated the income on daily basis
So this should be the example of the investment
Which of the following would have an inventory of municipal security secondary market positions?
the role of manager to organization is to?
Answer:
A manager has to perform functions like planning, organizing, staffing, directing and controlling. All these functions are essential for running an organization smoothly and achieving enterprise objectives. Planning is required for setting goals and establishing strategies for coordinating activities.
arett Motors is trying to decide whether it should keep its existing car washing machine or purchase a new one that has technological advantages (which translate into cost savings) over the existing machine. Information on each machine follows: Old machine New machine Original cost $9,000 $20,000 Accumulated depreciation 5,000 0 Annual cash operating costs 9,000 4,000 Current salvage value of old machine 2,000 Salvage value in 10 years 500 1,000 Remaining life 10 yrs 10 yrs Refer to Jarett Motors. The $4,000 of annual operating costs that are common to both the old and the new machine are an example of a(n) Select one: a. opportunity cost b. irrelevant cost c. future avoidable cost d. sunk cost
Answer:
Jarett Motors
The $4,000 of annual operating costs are an example of an
a. opportunity cost
Explanation:
a) Data and Calculations:
Old machine New machine
Original cost $9,000 $20,000
Accumulated depreciation 5,000 0
Annual cash operating costs 9,000 4,000
Current salvage value of old machine 2,000
Salvage value in 10 years 500 1,000
Remaining life 10 yrs 10 yrs
b) The annual operating costs are an example of opportunity cost because the alternative with the old machine will incur an annual operating cost of $9,000 instead of $4,000 with the new machine. This will translate to a forgone benefit of $5,000 ($9,000 - $4,000) in cost saving if the new machine is purchased.
Solve for the unknown interest rate in each of the following (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.):
Present Value Years Interest Rate Future Value
181 5 $ 317
335 17 1,080
48,000 13 185,382
40,353 30 531,618
Answer:
11.86%
7.13%
19.95%
8.97%
Explanation:
interest rate = [tex]\frac{future value}{present value}}^{\frac{1}{n} } - 1[/tex]
(317/181)^ (1/5) - 1 = 11.86%
1080/335)^(1/17) - 1 = .13%
(185,382/48,000)^(1/13) - 1 = 19.95%
(531,618 / 40,353)^(1/30) - 1 = 8.97%
The interest rate in the 1 case is 5.01%, 2 case is 5.79%, 3 case is 8.05%, 4 case is 10.60%.
What is interest rate?An interest rate is the amount of interest owed per period, as a quotient of the amount lent, deposited, or borrowed.
Computation of the interest rates :The formula for future value is:
[tex]\text{FV}= \text{PV} \ (1+r)^n[/tex]
where,
PV=present value
r=interest rate
n =number of periods/ years
FV = future value.
Then, the formula for finding r is :
[tex]\text{FV}= \text{PV} \ (1+r)^n\\\\r= (\dfrac{\text{FV}}{\text{PV}})^\dfrac{1}{\text{n}-1}[/tex]
case1:put the above formula in case 1 we get:
[tex]r= (\dfrac{\text{\$231}}{\text{\$190}})^\dfrac{1}{4}-1}\\\\r= (\dfrac{\text{\$231}}{\text{\$190}})^{0.25-1}\\\\r=(1.21578947)^{0.25-1}\\\\r=1.05006116 -1\\\\r=0.05006116\times100\\\\r=5.01%[/tex]
case2:Put the above formula in case 2 we get:
[tex]r= (\dfrac{\text{\$854}}{\text{\$310}})^\dfrac{1}{18}-1}\\\\r= (\dfrac{\text{\$854}}{\text{\$310}})^{0.0555-1}\\\\r=(2.75483871)^{0.0555-1}\\\\r=1.05785304 -1-1\\\\r=0.05785304\times100\\\\r=5.79%.[/tex]
case3:Put the above formula in case 3 we get:
[tex]r= (\dfrac{\text{\$1,48,042}}{\text{\$34,000}})^\dfrac{1}{19}-1}\\\\r= (\dfrac{\text{\$1,48,042}}{\text{\$34,000}})^{0.0526-1}\\\\r=(4.35417647)^{0.0526-1}\\\\r=1.08045444 -1\\\\r=0.08045444\times100\\\\r=8.05%[/tex]
case4:Put the above formula in case 4 we get:
[tex]r= (\dfrac{\text{\$412,862}}{\text{\$36,261}})^\dfrac{1}{25}-1}\\\\r= (\dfrac{\text{\$412,862}}{\text{\$36,261}})^{0.04-1}\\\\r=(12.4127958)^{0.04-1}\\\\r=1.10599913 -1\\\\r=0.10599913\times100\\\\r=10.60%.[/tex]
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The Wildhorse Company has disclosed the following financial information in its annual reports for the period ending March 31, 2017: sales of $1.484 million, cost of goods sold of $803,000, depreciation expenses of $175,000, and interest expenses of $89,575. Assume that the firm has an average tax rate of 35 percent. Compute the cash flows to investors from operating activity.
Answer: $535,251.25
Explanation:
Cash flow to investors from operating activities is calculated by:
= EBIT + Depreciation - Taxes
EBIT = Sales - Cost of goods sold - Depreciation
= 1,484,000 - 803,000 - 175,000
= $506,000
Taxes = Tax rate * (EBIT - Interest)
= 35% * (506,000 - 89,575)
= $145,748.75
Cash flow to investors = 506,000 + 175,000 - 145,748.75
= $535,251.25
4) The returns on the Bledsoe small-cap fund are the most volatile of all the mutual funds offered in the 401k plan. Why would you ever want to invest in the fund
Answer:
The summary of the given question is summarized in the explanation below.
Explanation:
Users might also opt for investment in a somewhat more "unstable" investment, and that we might risk lower because everything depends instead on the sensitivity of something like the participant's risks.A cautious investor can't invest throughout the micro-cap financing, whereas a risky investor is otherwise able to bear the risk as well as therefore an investment upon that condition increased risk would be equivalent to greater rewards.If total liabilities decreased by $27,275 during a period of time and stockholders' equity increased by $34,366 during the same period, the amount and direction (increase or decrease) of the period's change in total assets is a a.$7,091 decrease b.$27,275 increase c.$27,275 decrease d.$7,091 increase
Answer:
d.$7,091 increase
Explanation:
From the accounting equation, assets = liabilities + equity. If the total liabilities decrease by $27,275, the assets will also decrease by $27,275. Similarly, when stockholders' equity increased by $34,366, the amount of assets will increase by the same amount. The net increase in assets will be $7,091, which is the difference between the increase in stockholders' equity and the decrease in liabilities ($34,366 - $27,275).
Preferred stock has a par (face) value of $80. The annual dividend is $6.00 per share. Investors in this preferred stock have a required rate of return equal to 8%. Compute the current price of a share of the preferred stock.
Round to the second decimal place.
Answer: $75
Explanation:
Using the Gordon Growth Model:
Price of stock = Next year dividend / (Required return - growth rate)
Growth rate is 0% as dividend does not change per year.
Price of stock = 6 / 8%
= $75
Albatross Company purchased a piece of machinery for $60,000 on January 1, 2019, and has been depreciating the machine using the double-declining-balance method based on a five-year estimated useful life and no salvage value. On January 1, 2021, Albatross decided to switch to the straight-line method of depreciation. The salvage value is still zero and the estimated useful life did not change. Ignore income taxes.
Required:
a. What type of accounting change is this, and how should it be handled?
b. Prepare the journal entry to record depreciation for 2017. Show all calculations clearly.
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Answer:
Currently, the income statement for company reflects a total period cost for depreciation of $7,876,000
Dividends at FSL are expected grow at a rate of negative 5.4% per year (the dividends are getting smaller). The stock just paid a dividend of $3.93 per share, and investors require a return of 13% to invest in the company. What is the expected price of the stock next year?
Answer:
$21.37
Explanation:
g = -5.4%
D0 = $3.93
D1 = D0 (1+g)
D1 = 3.93*(1-0.054)
D1 = 3.93*0.946
D1 = 3.71778
Investors require a return (ke) of 12%
P0 = D1/(ke - g)
P0 = 3.71778 / (12% - (-5.4%)
P0 = 3.71778 / (12% + 5.4%)
P0 = 3.71778 / 17.4%
P0 = 3.71778 / 0.174
P0 = 21.3665517
P0 = $21.37
So, the expected price of the stock next year is $21.37.
Pat is on the Board of Directors for Zony, a consumer electronics manufacturer. Pat has been an excellent board member by providing leadership and expertise to the Zony Board. Zamzung is a consumer electronics manufacturer and direct competitor to Zony. Zamzung believes Pat would be a good addition to their Board of Directors. Zamzung asks Pat to join the Board of Zamzung. Can Pat be on the Board of Directors of both Zony and Zamzung?
Answer: No. Pat cannot be on the Board of Directors of both Zony and Zamzung.
Explanation:
No, Pat cannot be on the Board of Directors of both Zony and Zamzung. The Clayton Act prohibits this as Pat can have superior power and high control of the industry.
Pat can also face ethical issues such as internal tactics or sharing of information or conflict regarding decision making. Pat being on the Board of Directors of both Zony and Zamzung will lead to an unfair competition in the market as well.