Suppose that a consumer has income y in the current period, income y’ in the future period, and faces proportional taxes on consumption in the current and future periods. There are no lump-sum taxes. That is, if consumption is c in the current period and c’ in the future period, the consumer pays a tax sc in the current period, and s’c’ in the future period where s is the current-period tax rate on consumption, and s’ is the future-period tax rate on consumption. The government wishes to collect total tax revenue in the current and future periods, which has a present value of R. Now, suppose that the government reduces s and increases s’, in such a way that it continues to collect the same present value of tax revenue R from the consumer, given the consumer’s optimal choice of current period and future-period consumption. (a) Write down the lifetime budget constraint of the consumer. (b) Show that lifetime wealth is the same for the consumer, before and after the change in tax rates.

The questions of economics address which of the following ? check all that apply

Examine the following book-value balance sheet for university products inc. the preferred stock currently sells for $30 per share and pays a dividend of $3 a share. the common stock sells for $16 per share and has a beta of 0.9. there are 2 million common shares outstanding. the market risk premium is 9%, the risk-free rate is 5%, and the firm’s tax rate is 40%. book-value balance sheet (figures in $ millions) assets liabilities and net worth cash and short-term securities $ 2.0 bonds, coupon = 6%, paid annually (maturity = 10 years, current yield to maturity = 8%) $ 5.0 accounts receivable 3.0 preferred stock (par value $15 per share) 3.0 inventories 7.0 common stock (par value $0.20) 0.4 plant and equipment 21.0 additional paid-in stockholders’ equity 13.6 retained earnings 11.0 total $ 33.0 total $ 33.0 a. what is the market debt-to-value ratio of the firm? (do not round intermediate calculations. enter your answer as a percent rounded to 2 decimal places.) b. what is university’s wacc? (do not round intermediate calculations. enter your answer as a percent rounded to 2 decimal places.)

Adamson company manufactures four lines of garden tools. as a result of an activity analysis, the accounting department has identified eight activity cost pools. each of the product lines is produced in large batches, with the whole plant devoted to one product at a time. classify each of the following activities or costs as either unit-level, batch-level, product-level, or facility-level. activities (a) machining parts. (b) product design. (c) plant maintenance. (d) machine setup. (e) assembling parts. (f) purchasing raw materials. (g) property taxes. (h) painting.