Lately, there has been a lot of talk about changing the federal minimum wage in America. I wanted to take a quick look at how it has changed, over time. The minimum wage was instituted in 1938, so I looked at it from it’s inception to 2012. I wanted to compare it to the size...
Category: MBA
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What is the gold standard and what is fiat money?
History of Money As early as 12,000 BC, Anatolian obsidian was distributed as a raw material for stone-age tools. In the 9th millennium, organized trading appeared. Items like this could be considered the earliest instances of money. In 350 BC, Aristotle wrote: When the inhabitants of one country became more dependent on those of another, and...
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What is the historic CPI and PPI for the United States?
I found myself curious to see what recent trends in inflation are within the United States. I used the consumer price index and producer price index as two indicators of inflation. The consumer price index (CPI) is calculated by taking price changes for each item in the predetermined basket of goods and averaging them; the goods...
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What are the 2011 corporate tax rates?
This is an interesting (and timely) question. Corporations don’t pay just one tax rate. It depends on the level of taxable income. In order to find the answer, I looked at the instructions for Form 1120, on the IRS website. Under schedule J, line 2, it lists the tax rate schedule. Over But not over...
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Limited liability companies and their formation
A limited liability company (LLC) is a form of business structure that is very popular. A limited liability company allows the owners to have limited liability for the debts and actions of the company. Additionally, the company itself does not pay taxes. The tax liability is upon the owners. Within the state of Wisconsin, you...
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What is a “doing business as” name and how do you register one?
A “doing business as” or DBA name is an alias for a company. Within the state of Wisconsin, sole proprietors and general partners can do business under their own name but if you want to do business under another name, you must file a Registration of Firm Names with the county Register of Deeds. Need an...
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What is net working capital?
Put simply, net working capital is your current assets minus your current liabilities. So, what are current assets and what are current liabilities? Your current assets are anything that you would expect to be convertible into cash within one operating cycle. This means that they are cash, inventory, securities, prepaid expenses (like insurance or rent), accounts receivable, etc. Your...
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What is Dollar-Cost Averaging?
Dollar-Cost Averaging is an investment method that is meant to eliminate the risk of investing at the wrong time. The idea is that you buy shares of stock on a regular schedule, regardless of what the price is. You buy more shares when the price is low and fewer shares when the price is higher....
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What is an odd lot?
An odd lot is a securities trade made for less than the normal trading unit. If you are talking about stocks, an odd lot would generally be a trade of less than 100 shares. The number differs for other types of securities, though. In some cases, because of the size of the order, odd lot...
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What is a bond spread?
A bond spread is the difference between the yields of two bonds with different credit ratings. The differing ratings are usually because of different levels of risk involved with the bonds. Mathematically, you can calculate the spread by subtracting the interest rate of one bond from the interest rate of the other. For example, if...