Business
TABLE 1: MEDIAN HOUSEHOLD INCOME FOR SELECTED PLACES, 2018Place / Median Household IncomeUnited States / $57,652New York State / $62,765New York City metropolitan area / $75,368City of New York / $57,782TABLE 2: MEDIAN HOUSEHOLD INCOME, 2018FIVE BOROUGHS OF NEW YORK CITYPlace / Median Household IncomeBronx / $36,593Brooklyn / $52,782Manhattan / $79,781Queens / $62,008Staten Island / $76,244Source: United States Census BureauTable 1 shows that the United States and New York City have similar median household income values. Compare the data in Table 1 to the data in Table 2. Based on this comparison, which of the following statements is most accurate?A. Each borough of New York City has a household income distribution similar to that of the United States.B. Each borough of New York City has a household income distribution similar to that of New York State.C. Each borough of New York City has a household income distribution similar to that of the New York City metropolitan area.D. Each borough of New York City has a household income distribution similar to that of the City of New York.E. A comparison of data from one scale to a different set of scales can result in a flawed analysis.
Sherrod, Incorporated, reported pretax accounting Income of $86 million for 2024 . The following information relates to differences between pretax accounting Income and taxable Income: a. Income from installment sales of propertles included in pretax accounting income in 2024 exceeded that reported for tax purposes by $5 million. The Installment recelvable account at year-end 2024 had a balance of $6 million (representing portions of 2023 and 2024 Installment sales), expected to be collected equally in 2025 and 2026. b. Sherrod was assessed a penalty of $2 million by the Environmental Protection Agency for volation of a federal law in 2024 . The fine is to be pard in equal amounts in 2024 and 2025. c. Sherrod rents its operating facilitles but owns one asset acquired in 2023 at a cost of $92 million. Depreciation is reported by the straight-Ine method, assuming a four-year useful life. On the tax return, deductlons for depreclation will be more than straightIine depreclation the first two years but less than stralght-line depreclation the next two years (\$ in millions): d. For tax purposes, warranty expense is deducted when costs are incurred. The balance of the warranty liability was $1 million at the end of 2023. Warranty expense of $5 million is recognized in the income statement in 2024.$3 million of cost is incurred in 2024 , and another $3 million of cost anticipated in 2025 . At December 31,2024 , the warranty liability is $3 million (after adjusting entrles). e. In 2024, Sherrod accrued an expense and related llability for estimated pald future absences of $12 million relating to the company's new paid vacation program. Future compensation will be deductlble on the tax return when actually pald durling the next two years (\$10 million in 2025; $2 million in 2026). f. During 2023, accounting income included an estimated loss of $6 million from having accrued a loss contingency. The loss is paid in 2024, at which time it is tax deductible.
Occam Industrial Machines issued 148,000 zero coupon bonds five years ago. The bonds have a par value of $1,000 and originally had 30 years to maturity with a yield to maturity of 7.3 percent. Interest rates have recently increased, and the bonds now have a yield to maturity of 8.4 percent. Assume semiannual compounding for the bonds. What is the dollar price of the bonds? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Bond price What is the market value of the company's debt? Note: Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89. If the company has a $46.3 million market value of equity, what weight should it use for debt when calculating the cost of capital? Note: Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 1616.