Please Refrain from using Excel Thanks!
Homework Answers
| 4) | ||
| a) | It is a growing perpetuity. The PV (wealth needed today) of the growing perpetuity is given by | |
| PV = CF/(r-g), where CF = Cash flow = interest rate, g = growth rate in CF | ||
| = 150000/(0.08-0.04) = | $ 37,50,000 | |
| b) | Interest rate after tax = 8%*(1-20%) = 6.4% | |
| PV (wealth needed today) 150000/(0.064-0.04) = | $ 62,50,000 | |
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Please Refrain from using Excel Thanks!
4) a) You decide that your family would be comfortable...
4) a) You decide that your family would be comfortable living on an annual income of...
4) a) You decide that your family would be comfortable living on an annual income of S150,000, growing at 4% per year. You'd also like to continue generating this cash flow for your descendants, forever. With interest rates of 8%, how much wealth would you need today to provide this income starting with $150,000 one year from now? b) Suppose all income is taxed at 20%. How would this (if at all) change your answer to a)? Assume that you...
4) a) You decide that your family would be comfortable living on an annual income of...
4) a) You decide that your family would be comfortable living on an annual income of $150,000, growing at 4% per year. You'd also like to continue generating this cash flow for descendants, forever. With interest rates of 8%, how much wealth would you need today to provide this income starting with S50,000 one year from now? your b) Suppose all income is taxed at 20%. How would this (if at all) change your answer to a)? Assume that you...
a) You decide that your family would be comfortable living on an annual income of $150,000,...
a) You decide that your family would be comfortable living on an annual income of $150,000, growing at 4% per year. You’d also like to continue generating this cash flow for your descendants, forever. With interest rates of 8%, how much wealth would you need today to provide this income starting with $150,000 one year from now? b) Suppose all income is taxed at 20%. How would this (if at all) change your answer to a)? Assume that you still...
3) a) If the corporate tax rate is 30% and the individual tax rate is 10%...
3) a) If the corporate tax rate is 30% and the individual tax rate is 10% (and these are the only taxes), a corporation with $20,000 of operating income, what is the after-tax disposable income the corporation generated for its owners? The tax rate is 5% between $0-$10,000 and 12% between $10,001 _$20,000. If you earn $12,000, then what is the average tax rate and the marginal tax rate? b) 4) a) You decide that your family would be comfortable...
3) a) If the corporate tax rate is 30% and the individual tax rate is 10%...
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Please refrain from using excel thanks! 3) Small Inc. is considering the following project with the...
Please refrain from using excel thanks!
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Need assitance with E, F, G. Please refrain from using Excel! Thanks! 7) a) If the...
Need assitance with E, F, G. Please refrain from using Excel!
Thanks!
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Note: You MUST show ALL your work to receive FULL credit- that is, show timelines and...
Note: You MUST show ALL your work to receive FULL credit- that is, show timelines and calculator sequence to justify your answers. 1. Scott Frost has just won the Cornhusker Sweepstakes. He is entitled to receive one of the following prizes: a. $100,000 per year forever with the first payment received today b. $40,000 beginning next year growing by 4% forever. c. $200,000 for ten years starting in year 6. d. Ten payments of $150,000 per year starting one year...
SOLVE WITH A FINANCIAL CALCULATOR Note: You MUST show ALL your work to receive FULL credit-that...
SOLVE WITH A FINANCIAL CALCULATOR
Note: You MUST show ALL your work to receive FULL credit-that is, show timelines and calculator sequence to justify your answers. He is entitled to receive one of the following prizes: Scott Frost has just won the Cornhusker Sweepstakes. a. $100,000 per year forever with the first payment received today b, $40,000 beginning next year growing by 4% forever. c. $200,000 for ten years starting in year 6. d. Ten payments of $150,000 per year...
Using Excel please explain and show steps. Thanks You graduate from Hardvard and start your first...
Using Excel please explain and show steps. Thanks
You graduate from Hardvard and start your first job at age 25. Since you are a financially savvy person now, you decide to start planning for retirement right away. Your Aunt Betty died and left you $70K of which you decide to save $40K for your retirement plus an annual sum you will put away each year for 40 years at 7% interest. 1) To determine how much to save, you decide...
4) a) You decide that your family would be comfortable living on an annual income of S150,000, growing at 4% per year. You'd also like to continue generating this cash flow for your descendants, forever. With interest rates of 8%, how much wealth would you need today to provide this income starting with $150,000 one year from now? b) Suppose all income is taxed at 20%. How would this (if at all) change your answer to a)? Assume that you...
4) a) You decide that your family would be comfortable living on an annual income of $150,000, growing at 4% per year. You'd also like to continue generating this cash flow for descendants, forever. With interest rates of 8%, how much wealth would you need today to provide this income starting with S50,000 one year from now? your b) Suppose all income is taxed at 20%. How would this (if at all) change your answer to a)? Assume that you...
3) a) If the corporate tax rate is 30% and the individual tax rate is 10% (and these are the only taxes), a corporation with $20,000 of operating income, what is the after-tax disposable income the corporation generated for its owners? The tax rate is 5% between $0-$10,000 and 12% between $10,001 _$20,000. If you earn $12,000, then what is the average tax rate and the marginal tax rate? b) 4) a) You decide that your family would be comfortable...
3) a) If the corporate tax rate is 30% and the individual tax rate is 10% (and these are the only taxes), a corporation with $20,000 of operating income, what is the after-tax disposable income the corporation generated for its owners? The tax rate is 5% between $0-$10,000 and 12% between $10.001-$20,000. If you earn $12,000. then what is the average tax rate and the marginal tax rate? 4) a) You decide that your family would be comfortable living on...
Please refrain from using excel thanks!
3) Small Inc. is considering the following project with the following annual cash flows. Year Cash Flow -S10 0 4 $9 $2 $3 -$5 What is the payback period for this project? What is the discounted payback period for this project if the discount rate is 20%? If Small Inc. has a cutoff period of 2 years, briefly explain if they would accept this project under the payback method? What about the discounted payback...
Need assitance with E, F, G. Please refrain from using Excel!
Thanks!
7) a) If the corporate tax rate is 40% and the individual tax rate is 20% (and these are the only taxes), if a corporation has $50,000 of operating income, what is the after tax income for its owners? b) The tax rate is 15% between $0-$50,000 and 25% between $50,001-$100,000. If you earn $60,000, then what is your average and marginal tax rates? A bank has quoted...
Note: You MUST show ALL your work to receive FULL credit- that is, show timelines and calculator sequence to justify your answers. 1. Scott Frost has just won the Cornhusker Sweepstakes. He is entitled to receive one of the following prizes: a. $100,000 per year forever with the first payment received today b. $40,000 beginning next year growing by 4% forever. c. $200,000 for ten years starting in year 6. d. Ten payments of $150,000 per year starting one year...
SOLVE WITH A FINANCIAL CALCULATOR
Note: You MUST show ALL your work to receive FULL credit-that is, show timelines and calculator sequence to justify your answers. He is entitled to receive one of the following prizes: Scott Frost has just won the Cornhusker Sweepstakes. a. $100,000 per year forever with the first payment received today b, $40,000 beginning next year growing by 4% forever. c. $200,000 for ten years starting in year 6. d. Ten payments of $150,000 per year...
Using Excel please explain and show steps. Thanks
You graduate from Hardvard and start your first job at age 25. Since you are a financially savvy person now, you decide to start planning for retirement right away. Your Aunt Betty died and left you $70K of which you decide to save $40K for your retirement plus an annual sum you will put away each year for 40 years at 7% interest. 1) To determine how much to save, you decide...
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