Homework Answers
| This can be solved by discounting the $ 125,000 in 10 years at 9% | |
| Present value factor at 9% for 10 years is = 0.4224 | |
| Present value is = (125000*0.422410807) | |
| Present value is = $ 52,901.35/. | |
| Thus, Bob should offer lottery winners $ 52,901.35 today for him to be indifferent between the two choices. | |
Add Answer to:
Bob's Lottery Inc. has decided to offer winners a choice of $125,000 in 10 years or...
Bob's Lottery Inc. has decided to offer winners a choice of $220,000 in 10 years or...
Bob's Lottery Inc. has decided to offer winners a choice of $220,000 in 10 years or some amount currently. Assume that Bob's Lottery Inc. earns a 12 percent after-tax rate of return. What amount should Bob's offer lottery winners currently, in order to be Indifferent between the two choices? Use Exhibit 3.1. Amount
Jackson has the choice to invest in city of Mitchell bonds or Sundial, Inc. corporate bonds...
Jackson has the choice to invest in city of Mitchell bonds or Sundial, Inc. corporate bonds that pay 8.4 percent interest. Jackson is a single taxpayer who earns $63,000 annually. Assume that the city of Mitchell bonds and the Sundial, Inc bonds have similar risk. What interest rate would the city of Mitchell have to pay in order to make Jackson indifferent between investing in the city of Mitchell and the Sundial, Inc. bonds for 2019? (Use tax rate schedule)...
Jackson has the choice to invest in city of Mitchell bonds or Sundial, Inc. corporate bonds...
Jackson has the choice to invest in city of Mitchell bonds or Sundial, Inc. corporate bonds that pay 6.8 percent interest. Jackson is a single taxpayer who earns $62,500 annually. Assume that the city of Mitchell bonds and the Sundial, Inc. bonds have similar risk. What interest rate would the city of Mitchell have to pay in order to make Jackson indifferent between investing in the city of Mitchell and the Sundial, Inc. bonds for 2019? (Use tax rate schedule)...
Irene is saving for a new car she hopes to purchase either four or six years...
Irene is saving for a new car she hopes to purchase either four or six years from now. Irene invests $20.000 in a growth stock that does not pay dividends and expects a 6 percent annual before-tax return (the investment is tax deferred). When she cashes in the investment after either four or six years, she expects the applicable marginal tax rate on long-term capital gains to be 25 percent. (For all requirements, do not round Intermedlate calculations. Round your...
Hyundai is considering opening a plant in two neighboring states. Option 1: One state has a...
Hyundai is considering opening a plant in two neighboring states. Option 1: One state has a corporate tax rate of 10 percent. If operated in this state, the plant is expected to generate $1,100,000 pretax profit. Option 2: The other state has a corporate tax rate of 2 percent. If operated in this state, the plant is expected to generate $1,060,000 of pretax profit. a. What is the after state taxes profit in the state with the 10% tax rate?...
Jackson has the choice to invest in city of Mitchell bonds or Sundial, Inc. corporate bonds...
Jackson has the choice to invest in city of Mitchell bonds or
Sundial, Inc. corporate bonds that pay 5.2% interest. Jackson is a
single taxpayer who earns $42,500 annually. Assume that the city of
Mitchell bonds and the Sundial, Inc. bonds have similar risk.
What interest rate would the city of Mitchell have to pay in order
to make Jackson indifferent between investing in the city of
Mitchell and the Sundial, Inc. bonds for year 2018? (Use tax rate
schedule)...
Thank you ! If Julius has a 32 percent tax rate and a 10 percent after-tax...
Thank you !
If Julius has a 32 percent tax rate and a 10 percent after-tax rate of return, a $36,000 tax deduction in two years will save how much tax in today's dollars? Use Exhibit 3.1. (Round discount factor(s) to three decimal places.) Multiple Choice Ο Ο s36,000. Ο $9,516. Ο $29,736. Ο $11,520. Ο None of the choices are correct. EXHIBIT 3-1 Present Value of a Single Payment at Various Annual Rates of Return 4% 5% 6% 7%...
Crystal Displays Inc. recently began production of a new product, flat panel displays, which required the inve...
Crystal Displays Inc. recently began production of a new product, flat panel displays, which required the investment of $1,500,000 in assets. The costs of producing and selling 5,000 units of fat panel displays are estimated as follows: • Variable costs per unit: $122.00 ? 5 Direct materials Direct labor 7800 4800 Factory overhead Selling and administrative expenses 5 34,00 Total $232.00 Fixed costs: Factory overhead Selling and administrative expenses $245,000.00 148,000.00 Crystal Displays Inc. is currently considering establishing a selling...
Crystal Displays Inc. recently began production of a new product, flat panel displays, which requ...
Crystal Displays Inc. recently began production of a new product, flat panel displays, which required the investment of $1,300,000 in assets. The costs of producing and selling 5,000 units of flat panel displays are estimated as follows: 1 Variable costs per unit: 2 Direct materials $121.00 3 Direct labor 28.00 4 Factory overhead 49.00 5 Selling and administrative expenses 37.00 6 Total $235.00 7 Fixed costs: 8 Factory overhead $254,000.00 9 Selling and administrative expenses 147,000.00 Crystal Displays Inc. is...
In November 2020, after having incorporated Cookie Creations Inc., Natalie begins operations. She has decided not to pursue the offer to supply cookies to Biscuits. Instead, she will focus on offering cooking classes. The following events occur.
In November 2020, after having incorporated Cookie Creations Inc., Natalie begins operations. She has decided not to pursue the offer to supply cookies to Biscuits. Instead, she will focus on offering cooking classes. The following events occur.Nov. 8Natalie cashes in her U.S. Savings Bonds and receives $520, which she deposits in her personal bank account.8Natalie opens a bank account for Cookie Creations Inc.8Natalie purchases $500 of Cookie Creations’ common stock.11Cookie Creations purchases paper and other office supplies for $95. (Use...
Bob's Lottery Inc. has decided to offer winners a choice of $220,000 in 10 years or some amount currently. Assume that Bob's Lottery Inc. earns a 12 percent after-tax rate of return. What amount should Bob's offer lottery winners currently, in order to be Indifferent between the two choices? Use Exhibit 3.1. Amount
Jackson has the choice to invest in city of Mitchell bonds or Sundial, Inc. corporate bonds that pay 8.4 percent interest. Jackson is a single taxpayer who earns $63,000 annually. Assume that the city of Mitchell bonds and the Sundial, Inc bonds have similar risk. What interest rate would the city of Mitchell have to pay in order to make Jackson indifferent between investing in the city of Mitchell and the Sundial, Inc. bonds for 2019? (Use tax rate schedule)...
Irene is saving for a new car she hopes to purchase either four or six years from now. Irene invests $20.000 in a growth stock that does not pay dividends and expects a 6 percent annual before-tax return (the investment is tax deferred). When she cashes in the investment after either four or six years, she expects the applicable marginal tax rate on long-term capital gains to be 25 percent. (For all requirements, do not round Intermedlate calculations. Round your...
Hyundai is considering opening a plant in two neighboring states. Option 1: One state has a corporate tax rate of 10 percent. If operated in this state, the plant is expected to generate $1,100,000 pretax profit. Option 2: The other state has a corporate tax rate of 2 percent. If operated in this state, the plant is expected to generate $1,060,000 of pretax profit. a. What is the after state taxes profit in the state with the 10% tax rate?...
Jackson has the choice to invest in city of Mitchell bonds or
Sundial, Inc. corporate bonds that pay 5.2% interest. Jackson is a
single taxpayer who earns $42,500 annually. Assume that the city of
Mitchell bonds and the Sundial, Inc. bonds have similar risk.
What interest rate would the city of Mitchell have to pay in order
to make Jackson indifferent between investing in the city of
Mitchell and the Sundial, Inc. bonds for year 2018? (Use tax rate
schedule)...
Thank you !
If Julius has a 32 percent tax rate and a 10 percent after-tax rate of return, a $36,000 tax deduction in two years will save how much tax in today's dollars? Use Exhibit 3.1. (Round discount factor(s) to three decimal places.) Multiple Choice Ο Ο s36,000. Ο $9,516. Ο $29,736. Ο $11,520. Ο None of the choices are correct. EXHIBIT 3-1 Present Value of a Single Payment at Various Annual Rates of Return 4% 5% 6% 7%...
Crystal Displays Inc. recently began production of a new product, flat panel displays, which required the investment of $1,500,000 in assets. The costs of producing and selling 5,000 units of fat panel displays are estimated as follows: • Variable costs per unit: $122.00 ? 5 Direct materials Direct labor 7800 4800 Factory overhead Selling and administrative expenses 5 34,00 Total $232.00 Fixed costs: Factory overhead Selling and administrative expenses $245,000.00 148,000.00 Crystal Displays Inc. is currently considering establishing a selling...
Most questions answered within 3 hours.
-
A diver springs upward with an initial speed of 2.1 m/s from a
3.5-m board.
(a)...
asked 6 minutes ago -
Using α = 0.05, test if the mean weight change
is less than 0 if a...
asked 10 minutes ago -
In an isobaric compression process, the volume of steam is
reduced from 1 Mpa and 773...
asked 10 minutes ago -
blood glucose level for obese patient population have
a mean of 100 with a standard deviation...
asked 11 minutes ago -
Which of the following mutations is MOST likely to be
recessive?
A.
Deletion of a haplo-insufficient...
asked 15 minutes ago -
The U.S. Department of Transportation, National Highway Traffic
Safety Administration, reported that 77% of all fatally...
asked 27 minutes ago -
For 1 through 11, create an expression using the relational
operators, the logical operators, and variable...
asked 40 minutes ago -
Remove all recursion from the following grammar:
S -> Aa | Bb
A -> Aa |...
asked 33 minutes ago -
The production budget for Manner Company shows units to be
produced as follows: July, 550; August,...
asked 43 minutes ago -
Your group is required to develop a comprehensive Business plan
that will be used as a...
asked 47 minutes ago -
a radio station transmits at 78.1 mhz. a hz is an inverse
second. how far apart...
asked 1 hour ago -
Write the equilibrium expression for the dissociation in
water for CH5N, C2H5O2COOH, H3AsO4, KClO2, HC2H2ClO2.
asked 1 hour ago