Davis company began manufacturing operations on january 2, 2018. during 2018 davis reported pre-tax book income of $85,000 and had taxable income of $75,000. davis had a temporary difference relating to a prepaid asset which will be expensed as follows for book purposes: 2019 $ 7,500 2020 $ 2,500 the enacted tax rates are 30% for 2018 and 2019; and 40% for subsequent years. if no other temporary differences occurred subsequent to 2018, the deferred tax asset at the beginning of 2020 is:

Biochemical corp. requires $600,000 in financing over the next three years. the firm can borrow the funds for three years at 10.80 percent interest per year. the ceo decides to do a forecast and predicts that if she utilizes short-term financing instead, she will pay 7.50 percent interest in the first year, 12.15 percent interest in the second year, and 8.25 percent interest in the third year. assume interest is paid in full at the end of each year. a)determine the total interest cost under each plan. a) long term fixed rate: b) short term fixed rate: b) which plan is less costly? a) long term fixed rate plan b) short term variable rate plan