Emma and laine form the equal el partnership. emma contributes cash of $100,000. laine contributes property with an adjusted basis of $40,000 and a fair market value of $100,000.

a. how much gain, if any, must emma recognize on the transfer? must laine recognize any gain? if so, how much?

b. what is emma’s tax basis in her partnership interest? her § 704(b) book basis?

c. what is laine’s tax basis in her partnership interest? her § 704(b) book basis?

d. what tax basis does the partnership take in the property transferred by laine?

e. how will the partnership account for the difference between the basis and value of the property transferred by laine?

Suppose a starbucks tall latte cost $4.00 in the united states, 5.00 euros in the euro area and $2.50 australian dollars in australia. nominal exchange rates are .80 euros per dollar and 1.4 australian dollars per u.s. dollar. where does purchasing power parity hold? a. both the euro area and australia. b. neither the euro area or australia. c. the euro area but not australia. d. australia but not the euro area.

Why is the type of product sold in an industry an important characteristic? a firm that can differentiate its product from that of rivals may be able to charge a higher price for a superior product. a firm that sells intangible goods is usually considered a monopoly. service industries cannot differentiate their products, which makes it easy for new firms to enter the industry. expensive products are usually sold by perfectly competitive firms.

How should the environmental effects be dealt with when evaluating this project? the environmental effects should be ignored since the plant is legal without mitigation. the environmental effects should be treated as a sunk cost and therefore ignored. if the utility mitigates for the environmental effects, the project is not acceptable. however, before the company chooses to do the project without mitigation, it needs to make sure that any costs of "ill will" for not mitigating for the environmental effects have been considered in the original analysis. the environmental effects should be treated as a remote possibility and should only be considered at the time in which they actually occur. the environmental effects if not mitigated would result in additional cash flows. therefore, since the plant is legal without mitigation, there are no benefits to performing a "no mitigation" analysis.