Shannon’s Brewery in Keller, Texas is considering using a sales team to help it penetrate market areas not served by its current distributors. However, Shannon Carter, the CEO, wants to know whether it would be cheaper to hire an independent outside sales force rather than hire and train his own sales personnel. Estimates are that the costs of hiring, training, and maintaining his own sales force would entail fixed costs of salaries and administrative overhead of $300,000 per year. These sales people would also receive a 2.6% commission on all sales. If going with the independent sales force option, all costs would be variable in that these reps would be paid a commission of 9.6% on all sales. At what level of sales will the costs of each sales force be equal? Round your answer to the nearest dollar value. Round your answer to the nearest one dollar.

Lo.2, 3, 9 lori, who is single, purchased 5-years class property for $200,00 and 7-years class property for $420,000 on may 20, 2018. lori experts the taxable income derived form the business (without regard to the amount expensed under ⧠179) to be about $550,000. lori has determined that she should elect immediate ⧠179 expensing in the amount of $520,000, but she doesn’t know which asset she should completely expense under ⧠179. she does not claim any available additional first-year depreciation. a. determine lori’s total cost recovery deduction if the ⧠179 expense is first taken with respect to the 5-year class asset. b. determine lori’s total cost recovery deduction if the ⧠179 expense is first taken with respect to the 7-year class asset. c. what is your advice for lori? d. assume that lori is in the 24% marginal tax bracket and that she uses ⧠179 on the 7-year asset. determine the present value of the tax savings from the depreciation deductions for both assets. see appendix g for present value factors, and assume a 6% discount rate. e. assume the same facts as in part (d), except that lori decides not to use ⧠179 on either asset. determine the present value of the tax savings under this choice. in addition, determine which option lori should choose. f. present your solution to parts (d) and (e) of the problem in a spreadsheet using appropriate microsoft excel formulas. e-mail your spreadsheet to your instructor with a two-paragraph summary of your findings.

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