A contractor bought a concrete mixer at P120,000,00, if paid in cash, The mixer may also be purchased by installment to be paid within 5 years, If money is worth 8%, the amount of each annual payment, if all payments are made at the beginning of each year, is:

A contractor bought a concrete mixer at P120,000,00, if paid in cash, The mixer may also be purchased by installment to be paid within 5 years, If money is worth 8%, the amount of each annual payment, if all payments are made at the beginning of each year, is:

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 8P

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Concept explainers

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.

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A contractor bought a concrete mixer at P120,000,00, if paid in cash, The mixer may also be purchased by installment to be paid within 5 years. If
money is worth 8%, the amount of each annual payment, if all payments are made at the beginning of each year, is:

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