Bobby owns advertising solutions, inc. (asi) and sells 100% of the company stock on july 1 of the current year to an esop for $3,000,000. bobby had an adjusted basis in the asi stock of $450,000. if bobby reinvests in qualified replacement securities before the end of the current year, which of the following statements is true?

question 5 options:

a. bobby will not recognize long-term capital gain or ordinary income in the current year.

b. bobby must recognize $2,550,000 of long-term capital gain in the current year.

c. bobby must recognize $450,000 of ordinary income in the current year.

d. if bobby dies before selling the qualified replacement securities, his heirs will have an adjusted taxable basis in the qualified replacement securities of $450,000, bobby’s carryover adjusted basis

Which value describes the desire to be one’s own boss? a. autonomy b. status c. security d. entrepreneurship

Consider the local telephone company, a natural monopoly. the following graph shows the monthly demand curve for phone services and the company’s marginal revenue (mr), marginal cost (mc), and average total cost (atc) curves. 0 2 4 6 8 10 12 14 16 18 20 100 90 80 70 60 50 40 30 20 10 0 price (dollars per subscription) quantity (thousands of subscriptions) d mr mc atc 8, 60 suppose that the government has decided not to regulate this industry, and the firm is free to maximize profits, without constraints. complete the first row of the following table. pricing mechanism short run long-run decision quantity price profit (subscriptions) (dollars per subscription) profit maximization marginal-cost pricing average-cost pricing suppose that the government forces the monopolist to set the price equal to marginal cost. complete the second row of the previous table. suppose that the government forces the monopolist to set the price equal to average total cost. complete the third row of the previous table. under average-cost pricing, the government will raise the price of output whenever a firm’s costs increase, and lower the price whenever a firm’s costs decrease. over time, under the average-cost pricing policy, what will the local telephone company most likely do

Which of the following is an effective strategy when interest rates are falling? a. use long-term loans to take advantage of current low rates. b. use short-term loans to take advantage of lower rates when you refinance a loan. c. deposit to a short-term savings instrumentals to take advantage of higher interest rates when they mature. d.select short-term savings instruments to lock in earnings at a current high rates.