3. A business man wishes to earn 7% on his capital after payment of taxes. If the income from an available investment will be taxed at an average rate of 42%, what minimum rate of return, before payment of taxes, must the investment offer to be justified? 4. A P4,000 is borrowed for 75 days at 16% per annum simple interest. How much will be due at th e end of 75 days?
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3. A business man wishes to earn 7% on his capital after payment of taxes. If the income from an available investment will be taxed at an average rate of 42%, what minimum
4. A P4,000 is borrowed for 75 days at 16% per annum simple interest. How much will be due at th e end of 75 days?
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- Assume a consumer who has current period income y = 200 , future-period income y' = 150, current and future taxes t = 40 and t' = 50, respectively and faces a market real interest rate ofr 005, or 5% per period. The consumer would like to consume equal amounts in both periods, that is, he or she would like to set c = c', if possible. However, this consumer is a faced with a credit market imperfections, in that he or she cannot borrow at all, that is, s>or=20. (a) Show the consumer's lifetime budget constraint and indifference curves in a diagram. (b) Calculate his or her optimal current period and future-period consumption and optimal, saving, and show this in your diagram.Assume a consumer who has current period income y = 200 , future-period income y' = 150, current and future taxes t = 40 and t' = 50, respectively and faces a market real interest rate ofr 005, or 5% per period. The consumer would like to consume equal amounts in both periods, that is, he or she would like to set c = c', if possible. However, this consumer is a faced with a credit market imperfections, in that he or she cannot borrow at all, that is, s>or=20. (a) Show the consumer's lifetime budget constraint and indifference curves in a diagram. Calculate his or her optimal current period and future-period consumption and optimal, saving, and show this in your diagram. (b) Suppose that everything remains unchanged. except that now t = 20 and t' = 71. Calculate the effects on current and future con sumption and optimal saving, and show this in your diagram (d) Now, suppose alternatively that y = 100. Repeat parts (a) and (b), and explain any differences.The Rosy company, is planning to start an egg packing factory in the country of Bevery. The initial investment for the egg packing factory is $5Million and it will generate net revenues for every year for the next 10 years starting as $1M in the first year, and increasing by $0.5Million every year (e.g, 1M, 1.5M, 2M, 2.5M...). Currently £1 is equal to $20. However, the $ is being devalued (losing value) against the £ by 12% every year (so next year £1 will be $22.4 ). If Rosy company has a MARR of 30% in Bevery, what is the PW of this egg packing factory in £?
- 4. A pretzel manufacturer is considering buying another pretzel-making machine that costs $100,000. The machine will depreciate by 8% per year. It will generate real profits equal to $18,000 next year, $18,000 (1 − 8%) two years from now (that is, the same real profits but adjusted for depreciation), $18,000 (1− 8%) 2 three years from now, and so on. Determine whether the manufacturer should buy the machine if the real interest rate is assumed to remain constant at each rate in (a) through (c). a. 5% b. 10% c. 15%.Assume that the real interest rate is 8%. If a firm can invest in a piece of machinery that costs $8,000 today and will generate a profit stream of $3,000 at the end of each year for the next 3 years, what should the firm do? A. Invest in the machinery. B. Do not invest in the machinery.-Suppose the government has promised to pay $100 billion dollars in benefits 10 years from now. Assuming an interest rate of 4%, what is the present discounted value (PDV) of the obligation? Answer in billions of dollars, rounded to two decimal places.
- Consider a perpetuity with a coupon of 100. Imagine that the perpetuity is purchased at time t when the market interest rate is equal to 5%. Furthermore, imagine that the coupon income is taxed at 40% and that capital gains are taxed at 20%. What is the after tax rate of return if the perpetuity is sold at time t+1 when the market interest rate continues to be equal to 5%?The PH debt as of today amounts to 12 trillion. This balloons with an interest rate of 0.16% yearly. Suppose thegovernment requires every earning individual to pay the debt by 2030, how much each of us would need to paymonthly (annual payment amortized in 12 equal payments), assuming that inflation is 3%, the interest rate is 5.6%compounded daily, and we will start the payment by the end of 2022? The Philippines is estimated to have 110million people, with the work force of around 20%. please provide complete solution, formula and explanation. thank youThe PH debt as of today amounts to 12 trillion. This balloons with an interest rate of 0.16% yearly. Suppose thegovernment requires every earning individual to pay the debt by 2030, how much each of us would need to paymonthly (annual payment amortized in 12 equal payments), assuming that inflation is 3%, the interest rate is 5.6%compounded daily, and we will start the payment by the end of 2022? The Philippines is estimated to have 110million people, with the work force of around 20%. Show the solution
- What's the taxable equivalent yield on a municipal bond with a yield to maturity of 3.5 percent for an investor in the 33 percent marginal tax bracket? (Round your answer to 2 decimal places.)PMF, Inc., is equally likely to have EBIT this coming year of $10 million, $15 million, or $20 million. It's corporate tax rate is 40%, and investors pay a 10% tax rate on income from equity and a 40% tax rate on interest income. What is the interest tax shield if PMF has interest expenses of $5 million this coming year? A. $2 million B. $4 million C. $0.3 million D. $2.25 million1. Hula hoop fabrications cost $100 each. The H2H company is trying to decide how many of these machines to buy. The number of hoops for each year and for each level of capital stock shown as follows: Hula Hoop have a real value of $1 each. There is no other costs besides the cost of fabricators. a. Find the expected future marginal product of capital (in terms of dollar) for each level of capital. b. If the real interest rate is 12% per year, and the depreciation rate of capital is 20% per year, find the user cost of capital (in dollar per fabricator per year). How many fabricators should H2H buy?