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- 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 million5 Mr. H Salt purchased an 1/8 interest in a producing oil well for $45,000. Recoverable oil reserves for the well were estimated at that time at 15,000 barrels, 1/8 of which represented Mr. Salt's share of the reserves. During the subsequent year, Mr. Salt received $12000 as his 1/8 share of the gross income from the sale of 1000 barrels of oil. From this amount, he had to pay $3000 as his share of the expense of producing the oil. Compute Mr. Salt's depletion allowance for the year.37. Electronic Games is moving very quickly to introduce a new interrelated set of video games. The initial investment for equipment to produce the necessary electronic components is $9 million. The salvage value after 6 years is $700,000. Anticipated net contribution to income is $6 million the first year, decreasing by $1 million each year for 6 years, with all dollar amounts expressed in real dollars. Depreciation follows MACRS 5-year property, taxes are 40 percent, the real MARR is 18 percent, and inflation is 4 percent. d. Determine the FW of the after-tax cash flows. e. Determine the combined IRR of the after-tax cash flows. f. Determine the combined ERR of the after-tax cash flows.
- C = 10 + 0.5Y, I = 190 -20i Derive the IS equationThe PSB is well established accountancy and consultancy firm that has been providing servicesthroughout the Caribbean since the 1970s. On 2018 January 01, the firm agreed to create a floatingcharge of $100M over its fixed assets. This floating charge, registered on 2018 January 17,contained a clause providing that it would crystallise in the event of any default or enforcementproceedings against the company.On 2018 January 14, PSB refurbished its offices. In order to finance this interior design project,PSB withheld money due to the government and obtained a loan from KC Bank for $50M. Saidloan was secured over some of the office furniture. This charge was registered 2018 January 17.On 2018 March 15, John, supplier of the office furniture demanded payment. Following the adviceof the company’s financial director, the board secured the amount owing to John by a fixed chargeover the company’s assets. The financial director also advised the board that PSB would have beenunable to honour…Provide cash-flow diagram if applicable. 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%.
- A businessman is considering the purchase of a machine that is expected to be obsolete in 5years. The machine is worthP100,000. The prevailing rate of interest is 15%. His estimate of the annual gross incomes fromthe use of the machine isas follows:Year Income1 20,0002 25,0003 35,0004 30,0005 28,000Total = P138 999Should the businessman purchase the machine?9- Which of the following factors will lower down someone’s disposable income? a. More depreciation b. High personal taxes c. Low intermediate consumption d. More savings4. Poch placed Php2,500,000 in a time deposit that earns 0.75% per annum simple interest. The placement was made from October 10, 2021 until February 24, 2022. How much interest did he earn net of 20% withholding tax. Apply the Banker's Rule.
- i will 10 upvotes urgent. Which of the following statement correctly describes 'depreciation' ? (a) It is a monthly allowance for wear and tear of a capital good. (b) It is based on the demand and supply of consumer goods in market. (c) It is calculated as the cost of good divided by number of years of its useful life. (d) It accounts for sudden destruction of capital caused due to natural calamities.i will 10 upvotes do not use chatgpt urgent Which of the following statement correctly describes 'depreciation' ? (a) It is a monthly allowance for wear and tear of a capital good. (b) It is based on the demand and supply of consumer goods in market. (c) It is calculated as the cost of good divided by number of years of its useful life. (d) It accounts for sudden destruction of capital caused due to natural calamities.The expenses and income of an individual are given in table form to the right. Find the net monthly cash flow (it may be negative or positive). Assume that amounts shown for salaries and wages are after taxes and that 1 month=4 weeks. Income Expenses Part-time job: $1300/month Rent: $550/month Student loans: $6000/year Groceries: $60/week Scholarship: $8500/year Tuition and fees: $7500/year Health insurance: $55/month Entertainment: $300/month Phone: $45/month
