Homework Answers
Solution: $9516
Working: = $36,000 * 0.32 * 0.826 ( Discount Factor, 10%, 2 years)
= $9,515.52
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If Julius has a 32 percent tax rate and a 10 percent after-tax...
Hank, a calendar-year taxpayer, uses the cash method of accounting for his sole proprietorship. In late December, he per...
Hank, a calendar-year taxpayer, uses the cash method of accounting for his sole proprietorship. In late December, he performed $35,000 of legal services for a client. Hank typically requires his clients to pay his bills immediately upon receipt. Assume his marginal tax rate is 32 percent this year and will be 37 percent next year, and that he can earn an after-tax rate of return of 9 percent on his investments. a. What is the after-tax income if Hank sends...
15) O'Reilly is a masterful lottery player. The megamillion jackpot is now up to $200 million....
15) O'Reilly is a masterful lottery player. The megamillion
jackpot is now up to $200 million. If O'Reilly wins the jackpot, he
has a choice of receiving $200 million in five years or a smaller
lump sum now. Advise O'Reilly on his choice under the following
scenarios. Which option should he take and why? Use Exhibit 3.1. a.
O'Reilly's after-tax return is 10 percent. If he chooses the
current lump-sum option, the lottery will pay him $130 million. b.
O'Reilly's...
Reese, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late...
Reese, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December, she received a $20,000 bill from her accountant for consulting services related to her small business. Reese can pay the $20,000 bill anytime before January 30 of next year without penalty. Assume Reese's marginal tax rate is 32 percent this year and will be 37 percent next year, and that she can earn an after-tax rate of return of 12 percent on her...
If Julius has a 32 percent tax rate and a 10 percent after-tax rate of return,...
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.) $11,520. $29,736. None of the choices are correct. $36,000. $9,516.
manny, a calendar Maríny, a calendar year taxpayer, uses the cash method of accounting for his...
manny, a calendar
Maríny, a calendar year taxpayer, uses the cash method of accounting for his sole proprietorship in late December he performed $31,000 of legal services for a client. Manny typically requires his clients to pay his bills immediately upon receipt. Assume Manny's marginal tax rate is 40 percent this year and next year and that he can eam an affer-tax rate of return of 5 percent on his investments a. What is the after-tax income if Manny sends...
Hank, a calendar-year taxpayer, uses the cash method of accounting for his sole proprietorship. In late...
Hank, a calendar-year taxpayer, uses the cash method of
accounting for his sole proprietorship. In late December, he
performed $25,000 of legal services for a client. Hank typically
requires his clients to pay his bills immediately upon receipt.
Assume his marginal tax rate is 30 percent this year and will be 33
percent next year, and that he can earn an after-tax rate of return
of 12 percent on his investments. Use Exhibit 3.1.
a. What is the after-tax income...
Please answers to (a), (b), & (d) Reese, a calendar-year taxpayer, uses the cash method of accounting...
Please answers to (a), (b), & (d)
Reese, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December, she received a $65,000 bill from her accountant for consulting services related to her small business. Reese can pay the $65,000 bill anytime before January 30 of next year without penalty. Assume Reese's marginal tax rate is 32 percent this year and 35 percent next year, and that she can earn an after-tax rate of return of...
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Firm Q is about to engage in a transaction with the following cash flows over a...
Firm Q is about to engage in a transaction with the following cash flows over a three-year period. Use Appendix A and Appendix B. Taxable revenue Deductible expenses Nondeductible expenses Year0 $14,400 (4,700) (635) Year 1 $16,400 (6,800) (2,100) Year 2 $ 30,900 (11,450) 0 If the firm's marginal tax rate over the three-year period is 30 percent and its discount rate is 6 percent, compute the NPV of the transaction. (Expenses and cash outflows should be indicated by a...
Firm Q is about to engage in a transaction with the following cash flows over a...
Firm Q is about to engage in a transaction with the following cash flows over a three-year period. Use Appendix A and Appendix B. Taxable revenue Deductible expenses Nondeductible expenses Year $14,400 (4,700) (635) Year 1 $16,400 (6,800) (2,100) Year 2 $ 30,900 (11,450) 0 If the firm's marginal tax rate over the three-year period is 30 percent and its discount rate is 6 percent, compute the NPV of the transaction. (Expenses and cash outflows should be indicated by a...
15) O'Reilly is a masterful lottery player. The megamillion
jackpot is now up to $200 million. If O'Reilly wins the jackpot, he
has a choice of receiving $200 million in five years or a smaller
lump sum now. Advise O'Reilly on his choice under the following
scenarios. Which option should he take and why? Use Exhibit 3.1. a.
O'Reilly's after-tax return is 10 percent. If he chooses the
current lump-sum option, the lottery will pay him $130 million. b.
O'Reilly's...
Reese, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December, she received a $20,000 bill from her accountant for consulting services related to her small business. Reese can pay the $20,000 bill anytime before January 30 of next year without penalty. Assume Reese's marginal tax rate is 32 percent this year and will be 37 percent next year, and that she can earn an after-tax rate of return of 12 percent on her...
manny, a calendar
Maríny, a calendar year taxpayer, uses the cash method of accounting for his sole proprietorship in late December he performed $31,000 of legal services for a client. Manny typically requires his clients to pay his bills immediately upon receipt. Assume Manny's marginal tax rate is 40 percent this year and next year and that he can eam an affer-tax rate of return of 5 percent on his investments a. What is the after-tax income if Manny sends...
Hank, a calendar-year taxpayer, uses the cash method of
accounting for his sole proprietorship. In late December, he
performed $25,000 of legal services for a client. Hank typically
requires his clients to pay his bills immediately upon receipt.
Assume his marginal tax rate is 30 percent this year and will be 33
percent next year, and that he can earn an after-tax rate of return
of 12 percent on his investments. Use Exhibit 3.1.
a. What is the after-tax income...
Please answers to (a), (b), & (d)
Reese, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December, she received a $65,000 bill from her accountant for consulting services related to her small business. Reese can pay the $65,000 bill anytime before January 30 of next year without penalty. Assume Reese's marginal tax rate is 32 percent this year and 35 percent next year, and that she can earn an after-tax rate of return of...
Firm Q is about to engage in a transaction with the following cash flows over a three-year period. Use Appendix A and Appendix B. Taxable revenue Deductible expenses Nondeductible expenses Year0 $14,400 (4,700) (635) Year 1 $16,400 (6,800) (2,100) Year 2 $ 30,900 (11,450) 0 If the firm's marginal tax rate over the three-year period is 30 percent and its discount rate is 6 percent, compute the NPV of the transaction. (Expenses and cash outflows should be indicated by a...
Firm Q is about to engage in a transaction with the following cash flows over a three-year period. Use Appendix A and Appendix B. Taxable revenue Deductible expenses Nondeductible expenses Year $14,400 (4,700) (635) Year 1 $16,400 (6,800) (2,100) Year 2 $ 30,900 (11,450) 0 If the firm's marginal tax rate over the three-year period is 30 percent and its discount rate is 6 percent, compute the NPV of the transaction. (Expenses and cash outflows should be indicated by a...
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