1. What are the tax consequences for the transferor and transferee when property is transferred to a newly created corporation in an exchange qualifying as nontaxable under Sec 351? What items are considered to be property for purposes under Section 351? What items are not considered to be property? How is control defined under Section 351? Explain and be specific!

2. If the price per unit increases because of competition but the cost structure remains the same A. the breakeven point declines B. the degree of combined leverage rises C. the degree of financial leverage rises D. all of these.