...Should We Switch to Flat Tax? In general, all over the world more than ninety percent of government’s income comprises taxes collected from the public and corporations. American economy is concerned; it is the largest economy in the world. Government collects taxes directly and indirectly from individuals and corporations. Government is not a business entity but the regulating authority of the country. Therefore, government needs to fulfill needs and wants of people through economic activities, regulating the country towards the economic growth. The government frequently changes the economic policies to run the country in an acceptable level. Therefore, taxes are the main weapon used to control the country. American taxation policy for more than decades is progressive. i.e., those who earn more income should have to pay more taxes. This is the main tax policy has been used in America, but tax rate is increasing at the end. Economists and politicians speak about a new topic i.e., flat tax revolution. What is this new tax? That is according to Sexon, “a tax that charges all income earners the same percentage of their income” (240). However, in practice, this is not a new theory; many countries have already been implementing flat tax as the government tax policy. The flat tax system operates well in many countries. Hong Kong introduced this flat tax system sixty years back and Eastern European countries have been using flat tax since the early nineteen eighties. The ...
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...Income Taxes: Flat or Fixed Since President Abraham Lincoln introduced income taxes, it has been a profoundly discussed topic among the citizens. Americans have innumerable amount of beliefs and disagreements about how the tax brackets function and should function. A large number of Americans are pushing for a change in the way income tax system work. At the same time, many agree to keep the income tax brackets that separate the wealth classes. The controversy in connections with income taxes is ongoing. Is a flat rate income tax the most efficient for the United States government? Tax brackets have been around since the beginning of income taxes. Income taxes began with the passing of the sixteenth amendment. The sixteenth amendment states,...
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...applications of economic tools and analysis. To analyse the market, we will examine the price elasticity demand and income elasticity demand of tobacco products the factors affecting each of these and the externalities caused by this product. Further, to explore further into the tobacco market, this blog post will discuss the theory of Rational Addiction, which contributes greatly to tobacco consumption. A. Elasticity of tobacco products Before analysing the elasticity of the tobacco market, it is important to know the fundamentals of elasticity. To start, elasticity refers to the degree of change of the demand or supply of a product in response to change in price of the product. The elasticity of products varies because consumers may find some products more essential than others. A good or service is considered to be highly price elastic if a price increase leads to a sharp change in the quantity demanded or supplied. Conversely, the demand and supply of price inelastic goods or services sees modest changes with any change in price. In most countries, the price elasticity of demand for tobacco products is fairly inelastic. This will be discussed further below. I. Calculating price demand elasticity To determine the price demand elasticity of a product’s demand curve, the following equation can be used. Elasticity, Ped = (% change in quantity / % change in price) If the elasticity value we obtain from the above formula is greater than or equal to 1, the demand...
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...1. The company I have chosen for this assignment is Netflix. Netflix was able to distinguish itself from other companies such as Blockbuster by providing consumers an easy way to select movies they wanted and have them mailed to their homes without having to wait in lines at the traditional brick and mortar stores. Netflix was able to create a niche in DVD rental market by competing based on Pricing Behavior, Netflix offered a flat rate per month for their movies compared to Blockbuster that was currently based on pay per title. Sales Promotion, Netflix advertises online as well as traditional media such as Television and magazines. As the growth of broadband throughout the United States Netflix was able to leverage this new infrastructure and offer instant streaming of movies to its subscribers. With the success of Netflix currently holding an estimated 61% of the online streaming market share other Competitors such as amazon have entered the market to compete. Netflix is able to benefit by creating the online streaming model as they extend a flat fee per month for subscribers to have access to their streaming library. Netflix has applications that allow a lot of networked devices such as smartphones, game consoles and tablets to be able to allow subscribers to access movies anytime they wish all they require is a stable internet connection. As Netflix progresses they have entered the markets been able to gain market share from many companies and become close a monopoly...
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...SUMMARY AND ANALYSIS OF ARTICLE CHOSEN. The article that I have chosen was reported by Channel News Asia on 20th March 2014. It relates to the concept on demand and supply for housing units in Singapore and argued that the developers should build more smaller housing units in order to meet the growing demand for them as buyers are becoming more price sensitive. The article reports that caveats lodged with the Urban Redevelopment Authority and analysis provided by REMS Advisor, (one of Singapore’s advisory firms) indicated that 48% of total housing sales were from the sale of units below 800 square feet. This figure had jumped significantly from 31% in 2010 and 43% in 2012. An example used to affirm the shift in demand to smaller housing is the recent sales of UOL’s 555-unit Riverbank @ Fernvale in Sengkang. Despite a 40% of its units sold in over a month since its launch, it is the smaller units that were of highest demand as all of its one- and two-bedroom units were sold completely. The article also cites that the introduction of the new Total Debt Servicing Ratio framework that took effect from 29 June 2013 has led buyers to become more cautious about purchasing larger units which comes with higher price premiums. This new framework introduced by the Monetary Authority of Singapore has increased the requirements for housing loans and tightened the cap granted to individuals. Financial institutions will now have to consider other factors before granting loan to...
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...and success in his future studies and endeavor. PREFACE The PGDM program is well structured and integrated course of business studies .The main objective of practical training at PGDM level is to develop skill in student by supplement to the theoretical study of business management in general. Industrial exposure helps to gain real life knowledge about the industrial environment and business practices. The PGDM provides student with a fundamental knowledge of business and organizational functions and activities, as well as an exposure to strategic thinking of management. In every professional course, training is an important factor. Professors give us theoretical knowledge of various subjects in the college but we are practically exposed of such subjects when we get the training in the organization. It is only the training through which I come to know that what an industry is and how it works. Training is an integral part of PGDM and each and every student has to undergo the training for two months and half months in a company and then prepare a project report on the same after the completion of training. During this whole training in...
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...Nucor at a Crossroads MGMT XXXX-XXX Nucor’s Historic Performance, Competitive Advantage, and Five Forces Analysis With roots dating back to 1904 in the automobile manufacturing industry, Nucor’s business strategy has morphed many times over the course of the past century in response to struggling sales and unrealized business strategies. Since F. Kenneth Iverson’s appointment as Nucor’s President in 1965, however, Nucor has performed very well. With a focus on efficiency, Nucor is committed to minimizing bureaucracy and maximizing performance and productivity via the utilization of an open-door/continuous improvement/ entrepreneurial culture, a compensation scheme premised on performance-based incentives, and — last, but not least —commitment to technological advancement. With this approach, in an industry with 36 different companies, Nucor enjoyed the second largest market share in 1986, with 16 plants and an annual production capacity of 2.1 million tons of steel. In 1985, Nucor was ranked the most productive steel-maker in the United States and the second most productive in the world, averaging 981 tons per employee, per year. Nucor managed to achieve this success using a low-cost strategy, which proved to be particularly suitable in the highly competitive, commodity-like steel industry. Despite its positive performance, competition in the U.S. steel industry was keen in 1986. At that time, the industry had sustained seven straights years of decreasing domestic...
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...ABOUT THE AUTHOR Thomas Loren Friedman was born in Minneapolis, Minnesota, on July 20, 1953, and grew up in the middle-class Minneapolis suburb of St. Louis Park. He is the son of Harold and Margaret Friedman. From an early age, Friedman, whose father often brought him to the golf course for a round after work, wanted to be a professional golfer. He was captain of the St. Louis Park High golf team; at the 1970 U.S. Open at Hazeltine National Golf Club, he caddied for Chi Chi Rodriquez, who came in 27th. That, alas, was as close as Friedman would get to professional golf. In high school, however, he developed two other passions that would define his life from then on: the Middle East and journalism. It was a visit to Israel with his parents during Christmas vacation in 1968–69 that stirred his interest in the Middle East, and it was his high school journalism teacher, Hattie Steinberg, who inspired in him a love of reporting and newspapers. After graduating from high school in 1971, Friedman attended the University of Minnesota and Brandeis University, and graduated summa cum laude in 1975 with a degree in Mediterranean studies. During his undergraduate years, he spent semesters abroad at the Hebrew University of Jerusalem and the American University in Cairo. Following his graduation from Brandeis, Friedman attended St. Antony's College, Oxford University, on a Marshall Scholarship. In 1978, he received an M.Phil. degree in modern Middle East studies from Oxford. That summer...
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...Expansion Proposal E-Commerce Solutions The E-Commerce solution I recommend for Howard Signs and Design to leverage is the Intuit Online Payment System and Payment Network (IPN.intuit.com). This benefits the business because it is inexpensive. There are no setup fees, monthly fees or cancellation fees. Each inbound 2 bank transaction has a flat fee rate of fifty cents for payee and is free for all payers. Automatic bank to bank payments are quick, most are next day. Online invoicing is easy and payment requests can be sent directly to email, pay buttons are available for the business Web site and payment links can be put in invoices, emails, anywhere. Also, this same system can provide outbound payments to suppliers and vendors. This centralizes accounts receivables and accounts payable in one system without anyone else needing a payment network account. It is completely integrated with the current accounting system used by Howard Signs and Design providing seamless reconciliation with QuickBooks. The vendor benefits by earning the transaction fee and integrated revenue from QuickBooks business accounting software and Intuit tax return software which this business currently leverages. Web site banner advertising/affiliate marketing for Intuit as well as social media connections with Howard Signs and Design will also benefit the vendor. Search Engine Considerations & Optimization Strategies Online marketing is all about connecting customers with today’s virtual marketplaces...
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...Table 3: Own-bond-yiel-plus-risk-premium 12 Table 4: Cost of Equity, CAPM 14 Table 5: Cost of Equity, DCF 15 Table 6: Issuance of new common stock 18 Table 7: PNC’s WACC 18 Table 8: Capital budget 19 Table 9: Project evaluation 20 Table 10: Capital structure (weights) 21 Table 11: Capital structure (costs) 21 Table 12: Euro-denominated bonds 22 Executive Summary The cost of capital consists of three parts: cost of debt, preferred stock, and common equity. For bond evaluation we find the yield on the bonds and deduct the taxes, for preferred stock we consider the dividends and flotation costs and for cost of equity there are three different ways to estimate that is described in this report. For PNC the best is to use CAPM, because it considers market risk and that makes more informative to investors. To obtain the cost of weighted average cost of capital we multiply the cost of the above components with the desired weight. The heavier the weight is in certain component the bigger part it finances of the capital budget, and the closer the cost of capital to the cost of the particular component....
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...Comstrat 2008 - Tata Sky Ami Kothari amikothari10@jbims.edu +91-9820672221 Palak Sood Swathi Velisetty PalakSood09@jbims.edu swathivelisetty09@jbims.edu +91-98925 97890 +91-98205 62709 Jamnalal Bajaj Institute of Management Studies Environment Analysis - Porter’s 5 forces Bargaining Power of Supplier - High DTH relies on three major suppliers: Customer Premise Equipment – Satellite dish, Set top box and Access card, Ku Band Transponder and content. Bargaining power of DTH operator with CPE supplier has increased due to supply. Transponder is provided by Astrix, ISRO hence dependency exists and due to no regulations in channel pricing, DTH operators are at mercy of Broadcasters. Bargaining Power of Buyer-High Consumer has the power to choose in this industry with variety. Unless players can differentiate against each other, the market shall remain mostly homogeneous. Customers will have high bargaining power and will be influenced by costs versus services. Threat of Substitutes- Medium DTH faces major competition from Terrestrial, Cable & IPTV. Doordarshan is world’s largest Terrestrial broadcaster with over 1400 transmitters and covering 88% of India geographical area. They offer Digital service in collaboration with BBC resources. This wide reach and low cost approach are offset by its lack of attractive content. Cable TV operates in 2 modes: CASwhich requires separate set top box and Non Addressable system. The cost varies from Rs. 100 – Rs. 350 to customers depending...
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...and internal rate of return. One assesses the benefits of leasing versus buying by evaluating the cash flows under each alternative. The objective is to choose the alternative with the lowest cost, because the use of the asset is the same whether it is leased or bought. This assessment is a financial decision rather than an investment decision (where financing costs are excluded), because financing flows determine the investment method. The investment analysis justifying the purchase of the equipment must be completed prior to and independent of the lease-versus-buy decision. The discount rate used for the cash flows in the analysis is the after-tax cost of debt. This is because the cash-flow components are debt-like: Depreciation flows and lease payments are much more stable and predictable than free cash flow. Lease flows should be...
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...Johnson argues that such a tax will discourage successful people from working and will therefore make society worse off. An economist would say that Question 1 options: we should agree with Senator Brown. we should agree with Senator Johnson. a good decision requires that we recognize both viewpoints. there are no tradeoffs between equity and efficiency. Save Question 2 (1 point) When you calculate your true costs of going to college, what portion of your room-and-board expenses should be included? Question 2 options: Your full room-and-board expenses should always be included. None of your room-and-board expenses should ever be included. You should include only the amount by which your room-and-board expenses exceed the income you earn while attending college. You should include only the amount by which your room-and-board expenses exceed the expenses for rent and food if you were not in college. Save Question 3 (1 point) Which of the following is not generally regarded by economists as a legitimate reason for the government to intervene in a market? Question 3 options: to promote efficiency to promote equality to enforce property rights to protect an industry from foreign competition Save Question 4 (1 point) Senator Bright, who understands economic principles, is trying to convince workers in her district that trade with other countries is beneficial. Senator Bright should argue that trade can be beneficial ...
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...that manufacture nonalcoholic beverages; (2) those that manufacture alcoholic beverages through the fermentation process; and (3) those that produce distilled alcoholic beverages…” Although beer is within the same section as wine and distilled spirits, they do not consider them the same. Within section 312 they have five separate sections: Beer can be found under section 312120 Breweries. Within this section the term Breweries is comprised of “establishments primarily engaged in brewing beer, ale, malt liquors, and non-alcoholic beers”. However, Standard & Poor’s would say that distilled spirits, wine, beer and tobacco are all a part of the same industry the “Alcoholic Beverage and Tobacco Industry”. The question we must ask is who is right? How do we determine if beer is an industry on its own or...
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...on three aspects of foreign investment analysis that are infrequently considered in evaluating domestic projects: the difference between project and parent cash flows; incorporating political risks such as expropriation and currency controls; and factoring in inflation and exchange rate changes in cash flow estimates. It also evaluates the various methods used to incorporate in the investment analysis the additional risks encountered overseas. These points are brought out in the process of working through the International Diesel Corporation Case. The ability to perform a capital budgeting analysis is one of the most valuable skills we can provide our students; this case is designed to make them aware of many of the intricacies involved in doing such an analysis. At the back of the chapter I have included a set of questions (2-13) that students should bear in mind while reading the case. Addressing these questions will help them to get more out of the case. I have found that a quick review of capital budgeting basics, given in the first section, is useful for most students. The key point made in Appendix 17A is that a firm's exposure to political risk is a function of government actions and the impact of those actions on the firm's cash flows. The corollary is that a firm can take actions, preferably before making an investment, to reduce its susceptibility to political risk. Thus, much of political risk is firm-specific rather than county-specific. I discuss general principles...
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