Ultimately, the annual income the investor should be most interested in is: A. Potential gross income...
Ultimately, the annual income the investor should be most interested in is:
A. Potential gross income
B. Net operating income
C. After-tax cash flow
D. Before-tax cash flow
E. None of the above
Homework Answers
The answer is C. After-tax cash flow,
The investor is interested in annual after-tax cash flow because it is the amount that will be distributed by the company to its investors or may be retained and used by the company to further its economic activities
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Ultimately, the annual income the investor should be most
interested in is:
A. Potential gross income...
1. Answer True or False for the following: a. Taxable Income Gross Income - Expenses -...
1. Answer True or False for the following: a. Taxable Income Gross Income - Expenses - Depreciation charges b. For MACRS depreciation, salvage value varies c. Before tax ROR is higher/more than after tax ROR d. In most cases we want to maximize the depreciation charges taken in the first and second years. e. Payback period analysis may select the wrong alternative f. For straight line depreciation, a constant depreciation charge is made. Fill in the Blanks for the following...
Fill in the $ blanks LTVR Closing Costs V&C OE MARR 75% 5 points 10% 45%...
Fill in the $ blanks
LTVR Closing Costs V&C OE MARR 75% 5 points 10% 45% 15% Loan Term Cap Rate The Rate Interest Rate 10% 35% 6% Total Project Cost $4,000,000 Annual Depreciation: $ 160,000 Net Lease Rate Lensable Area 40.000 YEAR 1 Gross Potential income: $ Vacancy & Collections: Eective Gross income: $ Operating Expense Net Operating Income $ Loan Amounts Closing Costs Monthly PTS 5 Debt Service Before Tax Cash Flow 5 Net Operating Income Value $...
The rent that can be collected on an annual basis assuming that a property is completely...
The rent that can be collected on an annual basis assuming that a property is completely occupied is A. Real Returns B. Potential Gross Income C. Net Operating Expenses D. None of the above
The following information ($ in millions) comes from a recent annual report of Amazon.com, Inc.: Net...
The following information ($ in millions) comes from a recent annual report of Amazon.com, Inc.: Net sales $ 10,895 Total assets 4,470 End of year balance in cash 1,063 Total stockholders' equity 423 Gross profit (Sales – Cost of Sales) 2,464 Net increase in cash for the year 19 Operating expenses 2,065 Net operating cash flow 796 Other income (expense), net (16) Compute the income before income tax for Amazon. Multiple Choice A) $ 463 B) $ 503 C) $...
Question 22.) Which of the following is generally a tax-free cash flow to the investor? A....
Question 22.) Which of the following is generally a tax-free cash flow to the investor? A. Cash flow from operations B. Cash flow from refinancing C. Cash flow from cash received at closing upon disposition D. Cash flow from providing owner financing upon disposition E. None of the above are generally tax-free cash flows
A firm with an effective income tax rate of 42 percent is interested in purchasing a...
A firm with an effective income tax rate of 42 percent is interested in purchasing a new machine for $45,000. In order to pay for this asset, the firm acquired a $20,000 debt at 10 percent interest. The interest and the principal are to be paid in equal annual amounts over a 5 year period. The remaining $25,000 is from the firm’s equity capital. The minimum attractive rate of return is 10 percent (after tax). The useful life of this...
In 2020, an employee has annual gross salary of $86,000, annual taxable income of $43,000 (before...
In 2020, an employee has annual gross salary of $86,000, annual taxable income of $43,000 (before retirement contributions) and a flat income tax rate of 23%. He makes an annual tax deferred contribution of 3% to his traditional 401K. The employer matches 50% up to 1% of annual gross salary. How much will this employee have saved in 2020? Include all 2020 401K contributions and tax savings from 2020 401K contributions. Exclude investment earnings. a. $4,463 b. $4,033 c. $3,440...
10.31 Lessen 10: The Income Approach ASSIGNMENT 10, continued rent is the rental 12. Complete the...
10.31 Lessen 10: The Income Approach ASSIGNMENT 10, continued rent is the rental 12. Complete the following statement: contract rent is the actual rental income specified in a lease and market income that a property would most probably command in the open market. (1) Market, contract (2) Effective, potential (3) Contract, market T4) Net effective, net potential 13. A reconstructed operating statement should include: (1) additions to capital. (2) income tax (3) book appreciation. @ management charges. 14. Which of...
Question 2 An individual investor with $400,000 of annual taxable income purchased land for $120,000 and...
Question 2 An individual investor with $400,000 of annual taxable income purchased land for $120,000 and now has an offer to sell it for $150,000. The individual is already in the 35 % federal ordinary income tax bracket and pays a 6% state tax rate in Michigan on ordinary income. The applicable federal long term capital gains tax rate is 15 % but there is no corresponding reduction at the state level. State income taxes are deductible in computing federal...
22. An all-equity firm has net ind um has net income of $ 200 deration of...
22. An all-equity firm has net ind um has net income of $ 200 deration of $7.500, and taxes of $2,050. What is the firm's operating cash flow! A) $17.850 B) $21.950 C) $26,250 D) $35,800 E) $36,750 23. year project is expected to generate annual revenues of $114,500, variable, costs of $73,600, and fixed costs of $14,000. The annual depreciation is $3,500 and the tax rate is 34 percent. What is the annual operating cash flow? B) C) $14,301...
1. Answer True or False for the following: a. Taxable Income Gross Income - Expenses - Depreciation charges b. For MACRS depreciation, salvage value varies c. Before tax ROR is higher/more than after tax ROR d. In most cases we want to maximize the depreciation charges taken in the first and second years. e. Payback period analysis may select the wrong alternative f. For straight line depreciation, a constant depreciation charge is made. Fill in the Blanks for the following...
Fill in the $ blanks
LTVR Closing Costs V&C OE MARR 75% 5 points 10% 45% 15% Loan Term Cap Rate The Rate Interest Rate 10% 35% 6% Total Project Cost $4,000,000 Annual Depreciation: $ 160,000 Net Lease Rate Lensable Area 40.000 YEAR 1 Gross Potential income: $ Vacancy & Collections: Eective Gross income: $ Operating Expense Net Operating Income $ Loan Amounts Closing Costs Monthly PTS 5 Debt Service Before Tax Cash Flow 5 Net Operating Income Value $...
10.31 Lessen 10: The Income Approach ASSIGNMENT 10, continued rent is the rental 12. Complete the following statement: contract rent is the actual rental income specified in a lease and market income that a property would most probably command in the open market. (1) Market, contract (2) Effective, potential (3) Contract, market T4) Net effective, net potential 13. A reconstructed operating statement should include: (1) additions to capital. (2) income tax (3) book appreciation. @ management charges. 14. Which of...
Question 2 An individual investor with $400,000 of annual taxable income purchased land for $120,000 and now has an offer to sell it for $150,000. The individual is already in the 35 % federal ordinary income tax bracket and pays a 6% state tax rate in Michigan on ordinary income. The applicable federal long term capital gains tax rate is 15 % but there is no corresponding reduction at the state level. State income taxes are deductible in computing federal...
22. An all-equity firm has net ind um has net income of $ 200 deration of $7.500, and taxes of $2,050. What is the firm's operating cash flow! A) $17.850 B) $21.950 C) $26,250 D) $35,800 E) $36,750 23. year project is expected to generate annual revenues of $114,500, variable, costs of $73,600, and fixed costs of $14,000. The annual depreciation is $3,500 and the tax rate is 34 percent. What is the annual operating cash flow? B) C) $14,301...
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