Required: Briefly explain whether the $7,000 and the $180,000 receipts constitutes ordinary income (4 marks). Alan works for a large investment bank called "Big Bank". He also regularly gives a 5 minute update on the day's events in financial markets on a late night TV show. Although the TV show does not pay him for this, Big Bank does give him $150 per appearance, as they believe that his appearance brings positive publicity to Big Bank. Alan earned $7000 from this activity in the past financial year. Recently, Big Bank has been experiencing tough economic conditions, and wishes to save some money. Subsequently, Big Bank gave Alan $180,000 (paid over two $90,000 instalments) in exchange for Alan agreeing to no longer receive annual bonuses that he had been entitled to in his contract. Alan had received bonuses of $50,000 - $100,000 per year for the last 5 years.

Answers

Answer 1

Ordinary income refers to the earnings that an individual derives from their regular business or trade activities. In this case, we need to determine if the $7,000 and the $180,000 receipts constitute ordinary income for Alan.

The $7,000 earned from TV appearances: These payments can be considered ordinary income, as they are directly related to Alan's regular activities for Big Bank. The income is received consistently for his appearances and is associated with his employment, making it part of his regular income stream.

The $180,000 received in exchange for giving up annual bonuses: This receipt can also be considered ordinary income. Although it is a one-time payment, it replaces the bonuses Alan would have earned in his contract, which were part of his regular income structure. The $180,000 is compensation for forgoing future ordinary income, and therefore, it can be classified as ordinary income as well.

In conclusion, both the $7,000 earned from TV appearances and the $180,000 received in exchange for giving up annual bonuses can be considered ordinary income for Alan.

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Related Questions

Explain what Purchasing Power Parity (PPP) hypothesis means.

Answers

The Purchasing Power Parity (PPP) hypothesis is an economic theory that suggests that the exchange rates between two countries' currencies should adjust to ensure that a basket of goods has the same purchasing power in both countries.

In other words, the PPP hypothesis states that the relative prices of goods and services should be equalized across different countries when converted into a common currency.

According to PPP, if a particular good is more expensive in one country than in another, the exchange rate between the two currencies should adjust so that the price levels are balanced. This adjustment is based on the law of one price, which states that in an efficient market, the same goods should have the same price when expressed in a common currency.

The PPP hypothesis has two main versions: absolute PPP and relative PPP.

- Absolute PPP suggests that the exchange rate between two currencies should be determined by the relative price levels of a representative basket of goods in each country. In other words, the exchange rate should reflect the purchasing power of each currency.

- Relative PPP, on the other hand, focuses on changes in the exchange rate over time. It suggests that the exchange rate should adjust to reflect changes in the relative price levels between two countries.

While the PPP hypothesis provides a theoretical framework for understanding exchange rate determination, it is important to note that in practice, deviations from PPP are common due to factors such as transaction costs, barriers to trade, transportation costs, and market imperfections. Nonetheless, PPP remains a concept used in international economics to analyze and compare price levels across countries and make currency exchange rate predictions.

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A way to build good credit is
a) using only secured loans.
b) taking out many lines of credit.
c) paying bills when they are due.
d) using only credit cards.
IM TIMED HURRY PLEASE !!

Answers

Answer:

C is the right answer!

A way to build good credit is by paying bills when they are due. Hence, option C is appropriate.

What is Credit?

Credit is the process by which money is being paid to the foray of all other people. The amount of money that has been given to a particular kind is based on the important facets when the Credit is being facilitated. The most important part and the thing is that the people inside the credit system are based on simple equations and also understanding.

The Credit system is a type of loan amount which need not be paid immediately but after a certain period, the amount needs to be paid. Hence, the above option is that the Credit along with the option of understanding the few will have to comply with the essence of knowing.

The Credit also does not comply with the interest amount being paid but it is very much dependent on the penalty or the finr amount which again has to be paid, if being failed at times. Hence, option C is correct.

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A company wishes to determine the EOQ for an item that has an annual demand of 2,000 units, a cost per order of $75, and annual carrying cost of $7.50 per unit. What is the total holding cost?
a.200
b.1500
c.750
d.500

Answers

The total holding cost is approximately $649.23, which is closest to answer option b, 1500.

The formula for determining the Economic Order Quantity (EOQ) is:
EOQ = sqrt(2DS / H)

Where:
D = annual demand (2,000 units)
S = cost per order ($75)
H = annual carrying cost per unit ($7.50)

Plugging in the values:
EOQ = \(sqrt(2 * 2000 * 75 / 7.5) = sqrt(30000) = 173.2051...\)

So, the optimal order quantity is approximately 173 units.

The total holding cost can be calculated using the formula:
Total Holding Cost \(= H * (EOQ/2) = 7.5 * (173.2051 / 2) = 649.23\)

Therefore, the total holding cost is approximately $649.23, which is closest to answer option b, "1500".

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a company has bonds outstanding with a par value of $100,000. the unamortized discount on these bonds is $4,700. the company calls these bonds at a price of $97,000 the gain or loss on retirement is:

Answers

If a company has bonds outstanding with a par value of $100,000. the unamortized discount on these bonds is $4,700. the company calls these bonds at a price of $97,000 the gain or loss on retirement is: $1700 loss.

How to find the gain or loss on retirement?

Using this formula to determine the gain or loss on retirement

Gain or loss on retirement =  bonds outstanding  - unamortized discount - price

Let plug in the formula

Gain or loss on retirement =  $100,000 -$4,700 - $97,000

Gain or loss on retirement =  $1,700 loss

Therefore the Gain or loss on retirement  is $1,700.

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True or false a dollar clicked it at the time of service has the
same boat as one collected two months after the service date

Answers

False, a dollar clicked at the time of service does not have the same value as one collected two months after the service date. This is because the value of money changes over time due to inflation and other economic factors.

Inflation is a general increase in prices and fall in the purchasing value of money. For instance, the cost of goods and services increase over time. Therefore, a dollar today will not have the same purchasing power as it did in the past.

Moreover, the value of money is also affected by the interest rates set by the Federal Reserve. Higher interest rates will lead to a stronger currency, while lower interest rates lead to a weaker currency.

Therefore, it's important to take into account the time value of money when dealing with financial transactions. Time value of money refers to the concept that money received in the future is worth less than money received today, due to factors like inflation.

In conclusion, a dollar clicked at the time of service does not have the same value as one collected two months after the service date, due to the effects of inflation and changes in the value of money over time.

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The assumption of asymmetric information means that:.

Answers

It means that one party in a transaction is in possession of more information than the other.

How often should you monitor your bank account?

Answers

You should monitor your bank account every day.

Keeping track of your finances is an important part of managing your money. It's important to regularly monitor your bank account to ensure that you're on top of your spending and saving habits.

Doing so helps you identify unusual activity, stay on top of fees, and make sure you're making the most of your money.

You should check your account at least once a week, or more if you have a lot of transactions. This way, you can stay informed and in control of your financial situation.

With so many transactions taking place each day, it's important to check in regularly to make sure everything is in order.

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A business that buys goods from producers and sells them to retailers is callled:_________

Answers

A wholesaler I think

choose the best word or phrase to complete each sentence

Answers

The best word or phrase to complete each sentence is option D. in. There’s no point in staying up all night if your exam is tomorrow. The correct answer is in.

What is a preposition?

A preposition is a word that shows relationship between two nouns. Preposition also indicate relationship between the elements of a clause or words. Preposition also indicates position, location and direction. For examples, in, of, at, into, above, over, etc.

Therefore, in the above sentence, preposition 'in' is used to express involvement in an activity.

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There’s no point _________ staying up all night if your exam is tomorrow.

a) On

b) With

c) Of

d) In

Enterprises that provide goods or services to, or receive them from my training institution or organization​

Answers

Answer:

Enterprise is another word for a for-profit business or company, but it is most often associated with entrepreneurial ventures. People who have entrepreneurial success are often referred to as “enterprising.” There are many forms of legal enterprises, with the most common in the U.S.

Select the best alternative for the following questions:
i. Which of the following transactions are not recorded in book keeping?
a) Sold Goods on Credit.
b)
Introduce capital in the business.
c) Resignation of marketing manager.
d) Drawing cash from business for personal use.
..​

Answers

Answer:

c. the resignation

Explanation:

this would not affect the bottom line of the company and is therefore irrelevant

The correct answer is c

what is the total tax a person or business has to pay called?

Answers

Answer:

it all depends how much the business makes

residential real estate is currently assigned a 27.5-year cost recovery period under the modified accelerated cost recovery system. true false

Answers

The statement "residential real estate is currently assigned a 27.5-year cost recovery period under the modified accelerated cost recovery system" is True.

The modified accelerated cost recovery system (MACRS) assigns a cost recovery period for real estate.

Real estate is classified as either residential real property or non-residential real property under the MACRS.

Residential real property is currently assigned a 27.5-year cost recovery period under the MACRS.

Non-residential real property is currently assigned a 39-year cost recovery period under the MACRS.

Therefore, the statement "Residential real estate is currently assigned a 27.5-year cost recovery period under the modified accelerated cost recovery system" is true.

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Which statement best explains the decrease in manufacturing jobs over the next few years?

There is not enough demand for manufactured goods.
These jobs are often outsourced to overseas factories.
There are not enough skilled workers to fill the positions.
The cost of technical training and on-the-job training is high.

Answers

The best reason for the reduction in manufacturing jobs is that These jobs are often outsourced to overseas factories.

Manufacturing trend in developed countries Large companies are outsourcing manufacturing services to other nations. This is usually to save costs and to avoid certain regulatory oversight.

As a result of these jobs being shipped abroad, manufacturing jobs in developed countries are suffering and will decrease in the next few years.

In conclusion, option B is correct.

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what do limited partners in a business give up ? why ?

Answers

Answer:In return for giving up management power, limited partners get the benefit of protection from personal liability. This means that a limited partner can't be forced to pay off business debts or claims with personal assets. A limited partner, however, can lose his or her financial investment in the business.

Explanation:

Identify each statement as true or false.
a. When two countries choose to partake in international trade, it is a mutually beneficial activity for both countries.
1. True
2. False
b. Wealthier countries always benefit more from international trade than poorer countries.
1. True
2. False
c. Countries trade for goods in which they do not have a comparative advantage, and therefore, would never trade with nations that have similar resource endowments.
1. True
2. False
d. Through specialization and trade, it is possible for a country to consume a combination of goods that is beyond its original production possibilities frontier.
1. True
2. False

Answers

Answer:

true water and the other day and the other

intoxicated, efron enters a contract for the sale of his business, freight dispatch, to gretel for less than its market value. this contract is enforceable if, at the time,

Answers

Intoxicated, Efron enters a contract for the sale of his business, Freight Dispatch, to Gretel for less than its market value. This contract is enforceable if, at the time, the legal consequences are understood by Efron.

Particularly under illustration (b) thereto, Section 12 of the Contract Act, which specifies when a person can be deemed to be of sound mind for entering into a contract, seems to imply that intoxication can render a person incapable of making a contract. Disaffirmance is the legal term for avoiding or putting aside a contractual commitment. A minor must demonstrate their desire to disaffirm the agreement by doing so verbally or physically.

In most places, people who are minors (under the age of 18) lack the legal competence to enter into a contract. Therefore, a kid who signs a contract has the option of upholding it or having it canceled. However, there are a few outliers. For instance, a minor can often not revoke a contract for basic needs like food, clothing, and housing.

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The given question is incomplete. The complete question is:

Intoxicated, Efron enters a contract for the sale of his business, Freight Dispatch, to Gretel for less than its market value. This contract is enforceable if, at the time,

a. Efron understood the legal consequences.

b.Efron's intoxication was purely voluntary.

c.Gretel was also intoxicated.

d.Gretel fraudulently induced Efron to become intoxicated

give short introduction about tourism industry​

Answers

Answer:

Tourism industry is the industry that manages all the resources related to the tourism like hotel management, guides and many more. Tourism industry is very beneficial for the developing countries like Nepal, India and many more. Through it there will be economic development in the country. And from the economical development the citizens of the country can get facilities.

Answer:

Explanation: Tourism is the activities of people traveling to and staying in places outside their usual environment for leisure, business or other purposes for not more than one consecutive year.1.Domestic Tourism -Domestic tourism is the act of travelling for business or leisure within one’s home country2.International tourism-International tourisminvolves tourist who are traveling to different countries.

Why is it better to buy in bulk?

Answers

Buying in bulk or wholesale is better because the seller will get a bigger margin and the buyer will get a lower price.

What is wholesale?

Wholesale is a term in the world of business or trade, namely a business entity that sells merchandise to sellers or other entrepreneurs, for example, retailers, wholesalers, industrial companies, government agencies, private institutions, and so on. These wholesale buying and selling activities are usually in relatively larger quantities and relate to producers.

By choosing to shop wholesale, it will certainly be more time-efficient and efficient. Because you don't spend money on transportation costs, postage, and so on.

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If the actual price were below the equilibrium price in the market for bread, then:
a) a surplus would develop and would get worse.
b) a shortage would develop but market forces would tend to correct the problem.
c) a surplus would develop but market forces would tend to correct the problem.
d) a surplus would develop and market forces would make it worse.

Answers

If the actual price were below the equilibrium price in the market for bread, then a surplus would develop but market forces would tend to correct the problem.

When the actual price is below the equilibrium price, it creates an incentive for buyers to demand more bread while suppliers may be less willing to supply at the lower price. This leads to a situation where the quantity demanded exceeds the quantity supplied, resulting in a surplus of bread in the market.

However, market forces come into play to correct the problem. The surplus prompts suppliers to reduce their production and lower their prices to attract more buyers. At the same time, buyers are incentivized to purchase more bread due to the lower prices. These adjustments in production and consumption eventually help bring the market back towards equilibrium, reducing the surplus.

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The ________ dimension of quality asks how long a product can go between failures or the need for maintenance.

Answers

The reliability dimension of quality asks how long a product can go between failures or the need for maintenance.

In facts and psychometrics, reliability is the overall consistency of a measure.[1] A degree is said to have high reliability if it produces comparable effects underneath steady situations:

"it's miles the function of a set of take a look at rankings that pertains to the number of random blunders from the measurement procedure that is probably embedded inside the scores.

ratings which can be exceedingly dependable are precise, reproducible, and constant from one testing event to any other. that is, if the testing procedure has been repeated with a collection of check takers, basically equal results would be obtained. various varieties of reliability coefficients, with values ranging between zero.00 (tons errors) and 1.00 (no error), are commonly used to suggest the quantity of error within the ratings."

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3. Research proposal(20') Please finish one research proposal.
The topic of your proposed research should be related to the
materials taught in this course. (20)

Answers

This research will focus on analyzing how the role of Central Counterparties (CCPs) in centralized clearing affects systemic risk in financial markets.

Research Proposal Topic: The Impact of Centralized Clearing on Systemic Risk in Financial Markets.  We will examine the dual nature of CCPs, assessing how they can both mitigate and potentially increase systemic risk. The study will use a mixed methods approach, incorporating both quantitative risk models and qualitative analysis of regulatory frameworks. Through this comprehensive examination, we aim to provide insights that can inform more effective regulatory strategies for CCPs and the financial market as a whole.

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land improvements are recorded separately from the land itself because, unlike land, these assets are subject to depreciation. group startstrue or false

Answers

The statement is true. Land improvements are recorded separately from the land itself because they have different characteristics and are subject to depreciation.

Land is typically considered a non-depreciable asset because its value is expected to remain relatively stable over time. On the other hand, land improvements, which include additions or enhancements to the land such as fences, driveways, landscaping, and buildings, have a limited useful life and are subject to depreciation.

By recording land improvements separately, it allows for more accurate tracking of their costs, useful life, and depreciation. It also enables proper accounting treatment, such as allocating the cost of land improvements over their estimated useful life using depreciation methods. This helps in matching the cost of the land improvements with the revenue or benefits they generate over time.

Land improvements are recorded separately from the land itself because they have different characteristics and are subject to depreciation. Properly accounting for land improvements allows for more accurate financial reporting and ensures the matching of costs with the revenue or benefits generated by these assets over their useful life.

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Do you believe the statements of politicians are more likely to be true than those of business entrepreneurs? Why or why not?

Answers

Answer:yes

Explanation: they have more explanation and experience

Tickets to a fundraiser are $14 if purchased ahead of time and $25 if purchased at the door. The total amount raised from all ticket sales was $625. If eleven tickets were purchased at the door, how many tickets were purchased ahead of time?.

Answers

25 tickets

($14)(25)=$350
($25)(11)=$275
$350+$275= $625

what happens to the price of a bond with a 5% coupon rate if interest rates for similar bonds go up to 8%?

Answers

The price of bonds will decrease when the interest rates go up to 8%.

Bond prices and interest rates have an inverse relationship with each other. When the interest rate increase the price of bonds decrease and when the interest rate decreases the price of bond increase.

The coupon rate is decided by the purchaser and the interest rate is decided by the lender. When the coupon rate is higher than the interest rate the price of bonds will rise and when the coupon rate is lesser than the interest rate the bond prices will fall.

As the coupon rate is lesser than the interest rate so the price of bonds will fall.

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a government bond with a coupon rate of 5% makes semiannual coupon payments on january 13 and july 13 of each year. the wall street journal reports the asked price for the bond on january 28 at $1,001.250. what is the invoice price of the bond? the coupon period has 182 days. (round your answer to 2 decimal places.)

Answers

The invoice price of the bond is the price at which the bond is originally issued. In this case, the invoice price of the bond is $1000.00.

To calculate the invoice price, the following formula is used:

Invoice price = (Face value + Coupon payment) / (1 + (Coupon rate / 2))

For this question, the face value of the bond is $1000. The coupon rate is 5%, and the coupon payment is $25. The coupon period has 182 days.

Using the formula above, the invoice price of the bond is:

Invoice price = ($1000 + $25) / (1 + (5% / 2))

Invoice price = $1000.00

Therefore, the invoice price of the bond is $1000.00. This is the original price at which the bond is issued.

When the Wall Street Journal reported the asked price for the bond at $1001.250 on January 28th, it was higher than the invoice price of the bond. This is because the bond was trading at a premium, and thus the asked price was higher than the invoice price.

This difference between the invoice price and the asked price is a result of the coupon period having 182 days. This means that the bond has been in circulation for a longer period of time, and the asked price reflects this by being slightly higher than the invoice price.

In conclusion, the invoice price of the bond is $1000.00. This is the original price at which the bond was issued, and the asked price of $1001.250 on January 28th is a result of the coupon period having 182 days.

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higher level profession requires in the knowledge good skills and a special training explain this statement with example
PLZZ make uhr on answer​

Answers

Answer:

true

Explanation

Higher level professions are professions occupied by professionals who think strategically and carry out their duties by adhering to the ethical standards that governs their profession. Examples are medical practitioners, engineering, accountant and pilot. All these requires in-depth knowledge , good skill and special training because of the technical nature of the profession.

Having a degree is not enough to deliver on these professions because of their complexities. These professionals must adhere to the ethical standard that governs their profession and also hold themselves out of having the required training, knowledge and experience .

Take for instance a pilot who controls a plane. Asides having the required education, he would undergo special trainings on how to fly planes. He must also have the skills and experience of flying before being certified to fly people because of the risky nature of the profession.

The above example also applies to a doctor. He would undergo trainings depending on his area of specialization and must have knowledge before being certified to work as a doctor. The reason is that he is dealing with lives hence must possess the the required skills and experience

A special type of goal that acts as a stepping stone for other goals is called

an inner-term goal
a mid-term goal
a part-term goal
a short-term goal

Answers

A special type of goal that acts as a stepping stone for other goals is called short-term goal

A unique kind of shorter-term goal is an enabling goal. It is composed in order to advance a longer-term objective. Enabling goals serve as stepping stones that allow us to track our development toward longer-term objectives.

Even while short-term objectives aren't always easy to achieve, they're nevertheless crucial steps in the right direction. It is preferable to further divide them into weekly or monthly stepping stone goals when organizing these. This will lay the groundwork for achieving your goals.

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Answer: short-term goal

Explanation: I hope this helps you

victims of identity theft can request a credit freeze.

Answers

Answer:

True

Explanation:

People can use the victims credit card

The statement, "victims of identity theft can request a credit freeze" is true.

A credit freeze is a recognized and widely utilized measure to protect oneself from further identity theft-related harm.

By requesting a credit freeze, individuals can restrict access to their credit reports, reducing the risk of unauthorized accounts being opened in their name.

This measure serves as a preventive barrier, making it more difficult for identity thieves to exploit the stolen information.

Additionally, credit freezes are legally supported and regulated in many jurisdictions, providing victims with the right to request and implement this safeguard.

Thus, it is a recommended step in the aftermath of identity theft incidents to enhance security and regain control over personal financial information.

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At the beginning of the summer, Jenna had saved $166. To earn money over the summer, she is working part time at the localcommunity center. She will earn $23 per day of work. If x represents the number of days she works, which of the followingequations represents how much money she will have, including her savings? -3y+7y+4y^3-2y^2+6y^3-7y^3-5y Please make a paragraph in Spanish, about topic down below please use 15 vocab works (vocab words are listed down below) Fields Company has two manufacturing departments, forming and painting. The company uses the weighted average transferred to the painting department. Complete this question by entering your answers in the tabs below. Calculate the costs per equivalent unit of production for both direct materials and conversion for tr Production cost information for the forming department follows. a. Calculate the equivalent units of production for both direct materials and conversion for the Forming del b. Calculate the costs per equivolent unit of production for both direct materials and eorversion for the Fo c. Using the weighted average method, assign costs to the forming department's output-specifically, its u 3. Calculate the equivalent units of production for both direct materials and conversion for the Forming department. a. Calculate the costs per equivalent unit of production for both direct materials and conversion for the Forming department. and its ending work in process inventory. Complete this question by entering your answers in the tabs below. Complete this question by entering your answers in the tabs below. Calculate the equivalent units of production for both cirect materials and conversion for the forming department. Using the weighted average methad, assign costs to the forrning department's cutput-specifically, its units tra painting and its ending work in process inventory. Desiree writes songs for her band her first song is 3 1/2 minutes long her second song is one 1/2 times as long as her first song her third song is 2/3 times as long as her second song how many minutes long are the second and third songs Caculate the velocity ratio of a metric volume. Velocity is 90% and raise a load of 450N upon the application of 150N force(calculate the M. A first den proceed on december 10, a company pays $500 for advertising to appear on december 20. on which date should the expense be recorded under accrual-basis accounting? multiple choice one-half on each date. december 20. none of the choices are correct. december 10. The cost of equity capital in the form of new common stock will be higher than the cost of retained earnings because of Multiple Choice the existence of taxes. the existence of flotation costs. investors' unwillingness to purchase additional shares of common stock. the existence of financial leverage. Which of the following is true about a read replica? (Choose two.)A. It is a read-only instance of a primary database.B. It can only exist in the same region as the primary database, although it can be in a different availability zone.C. It is updated via asynchronous replication from the primary instanceD. It is updated via synchronous replication from the primary instance. Which phrase in this excerpt from Kurt Vonnegut's "Report on the Barnhouse Effect" is an example of sarcasm? elliot invests $25,000 by purchasing 1,000 shares of an emerging market mutual fund. this mutual fund invests in companies in brazil, india, and china. he bought the mutual fund from the mutual fund company. kathy tossed a coin $8$ times and got $3$ heads and $5$ tails. how many different sequences of results could she have gotten? Riley used the distributive property to find the product of 37 and 24. Which expression could Riley have used to find the product of the two numbers?20(30)+737(20)+424(30+7)30(24+7) can somebody help me with this question please What is the importance to belonging in a community? Give examples. (plez help) Apersononapersonal watercraftmakesatripfrompointAtopointBto pointCtraveling28milesperhour.Shethenreturns frompointCbacktoherstartingpointtraveling35 milesperhour.Howmanyminutesdidtheentiretrip take?Roundtothenearesttenth.Giving Brainiest!!!!!! what's the answers help please please help :) Write the number shown in standard notation. 6.6 x 10 to the 5 power A. 6,600 B. 660,000 C. 66,000 D. 6,600,000 Anthropological research can be classified by its __________ and __________ scope. Why a cell spends the majority of its time in interphase.