After-tax cost of debt personal finance problem bella wans is interested in buying a new motorcycle. she has decided to borrow the money to pay the $20 comma 000 purchase price of the bike. she is in the 33% income tax bracket. she can either borrow the money at an interest rate of 4% from the motorcycle dealer, or she could take out a second mortgage on her home. that mortgage would come with an interest rate of 8%. interest payments on the mortgage would be tax deductible for bella, but interest payments on the loan from the motorcycle dealer could not be deducted on bella's federal tax return. a. calculate the after-tax cost of borrowing from the motorcycle dealership. b. calculate the after-tax cost of borrowing through a second mortgage on bella's home. c. which source of borrowing is less costly for bella? d. should bella consider any other factors when deciding which loan to take out?

Insurance companies have internal controls in place to protect assets, monitor the accuracy of accounting records and encourage operational efficiencies and adherence to policies. these internal controls are generally of two types: administrative controls and accounting controls. administrative controls are the policies and procedures that guide the daily actions of employees. accounting controls are the policies and procedures that delineate authorizations of financial transactions that are done, safeguard assets, and provide reports on the company’s financial status in a reliable and timely manner. internal controls should include both preventative and detective controls. the purpose of preventative controls is to stop problems and errors before they occur. detective controls identify problems after they have occurred. preventative controls are usually more effective at reducing problems, but they also tend to be more expensive. internal controls must be flexible to adjust for changes in laws and regulations in addition to adding new products or modifying current ones. companies must also do regular analyses to ensure that the benefits of implementing the controls are worth their costs. when concerned about paying unwarranted insurance claims which type of control would be useful?

Cash flow is often a problem for small businesses. how can an entrepreneur increase cash flow? a) locate lower-priced suppliers. b) forego sending in estimated tax payments to the irs c) shorten the terms on a bank loan to pay it off more quickly d) sell more low-margin items.

In 1975, mcdonald’s introduced its egg mcmuffin breakfast sandwich, which remains popular and profitable today. this longevity illustrates the idea of: