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All of the stock in Galaxy, Inc. (a C corporation), a specialty store, is owned by Skywalker, a 501(c)(3) organization. During the current year, Galaxy reports taxable income before taxes of $8,000,000. Galaxy distributes $5,000,000 to Skywalker, and retains the balance for expansion purposes. Which of the following statements is correct? 

A pharmaceutical company tests whether a new drug lowers blood pressure more effectively than the current standard. What would be the appropriate alternative hypothesis test.

For these next two problems, write out as much work and upload your work to the Midterm Exam II Work assignment to receive points for these problems. Please make sure to clearly label the problem and the work shown.  

Researchers are trying to determine the proportion of people who get hip replacements that go on to have a full recovery. Out of a sample of 300 individuals, 102 made a full recovery. Construct and interpret a 95% confidence interval for the proportion of patients that made a full recovery. Previous estimates of patients who recovered fully from surgery sit at a proportion of 0.5. Has the population proportion changed? Please explain.

Use the following tree diagram to answer the next three questions:

Regarding a proportionate current distribution, all of the following statements are correct, except: 

An example of the “aggregate concept” underlying partnership taxation is the fact that the partners (rather than the partnership) pay tax on partnership income.

Under the at-risk rules, non-recourse debt generally is included in the amount at risk.

Which of the following statements is correct regarding liquidating distributions to a retiring partner under §736.

Which of the following is incorrect regarding the optional §754 election partnerships may make.