Calculus: Learning Worksheets Chapter 11 6. A family has leased the oil rights of a property to a petroleum company in return for a perpetual annual payment of $1500. Find the capital value of this lease at 8% compounded continuously. of clos
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Business Calc 2
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- An investor purchases a plot of land for £400,000 and intends to construct a building which will be leased out as office space. Construction will start in 6 months' time and will last 18 months. Construction costs will be incurred continuously at a rate of £600,000 per annum. The investor will be able to lease out the building immediately after construction ends. Rental income will be received continuously for 20 years, starting at £100,000 per annum in the first year, £150,000 in the second year, £200,000 in the third year and thereafter increasing by 5% every 12 months. Maintenance costs will be incurred (during those 20 years) half-yearly in arrears, starting at £5,000 for the first half-year and increasing by 2% every half-year. After renting out the building for 20 years, the investor expects to sell the land and building for £800,000. Calculate the net present value of the project at an effective rate of interest of 10% per annum.What numbers do I put in the PMT formula on excel? Craig has decided to start snow plowing during the winter months. He purchased a heavy-duty dump truck with plow and salter from Power Equipment for $40,000 on October 1st, 2026. He paid $1,000 as a down payment and the remaining balance on a 5% -7 year note to Power Equipment. You will be completing several accounting activities in regards to this purchase. 1. Prepare amortization schedules in Excel for the purchase of the Truck with snow plow. Craig wants to know the total interest cost if he made monthly payments or quarterly payments. You will calculate the payments using the PMT function. Your amortization table should show the principal and interest amount for each payment for the entirety of the loan. The payments will begin on December 1st, 2026.John Keeley begins operating his Black Hole Bar and Grill on 1/1/19 with an equity investment of $100,000. Keeley assumes that he will earn $77,000 in cash revenues and incur cash operating expenses of 36.00% of revenues each year. The corporate tax rate is assumed to be 21.00%. Also on 1/1/19, Keeley leases Equipment to be used in his business. The term of the lease is for 5.00 years and is not cancellable. The present value of the Equipment is $37,500. The economic life of the Equipment is assumed to be 5.00 years with Guaranteed Residual Value $5,625; Expected Residual Value $1,125 and Actual Residual Value $5,625. The company uses straight line depreciation for financial reporting purposes and for tax purposes. Furthermore assume that Keeley knows that the lease company's cost of funds is 6.50%. 1) Create an amortization table for this lease (be careful). 2) How should Keeley Account for this lease (Perform Lease Classification Tests)? 3) Provide ALL journal entries and ALL…
- Henredon purchases a high-precision programmable router for shaping furniture components for $190,000. It is expected to last 12 years and have a salvage value of $5,000. It will produce $45,000 in net revenue each year during its life. All dollar amounts are expressed in actual dollars. Depreciation follows MACRS 7-year property, taxes are 25%, the actual aftertax MARR is 14.62%, and inflation is 4.2%. Solve, a. Determine the real after-tax cash flows for each year. b. Determine the PW of the after-tax cash flows. c. Determine the AW of the after-tax cash flows. d. Determine the FW of the after-tax cash flows. e. Determine the real IRR of the after-tax cash flows. f. Determine the real ERR of the after-tax cash flows. g. Determine the combined IRR of the after-tax cash flows. h. Determine the combined ERR of the after-tax cash flows.Sullivan-Swift Mining Company must install $1.2 million of newmachinery in its Nevada mine. It can obtain a bank loan for 100% of the required amount.Alternatively, a Nevada investment banking firm that represents a group of investorsbelieves that it can arrange for a lease financing plan. Assume that the following factsapply:1. The equipment falls in the MACRS 3-year class. The applicable MACRS rates are 33%,45%, 15%, and 7%.2. Estimated maintenance expenses are $80,000 per year.3. Sullivan-Swift’s federal-plus-state tax rate is 45%.4. If the money is borrowed, the bank loan will be at a rate of 13%, amortized in 4 equalinstallments to be paid at the end of each year.5. The tentative lease terms call for end-of-year payments of $300,000 per year for4 years.6. Under the proposed lease terms, the lessee must pay for insurance, property taxes, andmaintenance.7. The equipment has an estimated salvage value of $300,000, which is the expectedmarket value after 4 years, at which time…An undeveloped land in Cabanatuan City, Nueva Ecija bought by XYZ Developer Corporation for ₱450,000 was held for four years and sold for ₱1,062,500. During this time property tax was paid that was, on the average, 0.4% of the purchase price. Inflation in this time period averaged 7% and the income tax was 15.2% of the long-term capital gain. What rate of return was obtained on the investment? Ferdinand deposits a sum of ₱20,000 at the interest rate of 18% compounded annually for 10 years. Find the maturity value after 10 years. A bank gives a loan to a company to purchase an equipment worth ₱1,000,000 at an interest rate of 18% compounded annually. This amount should be repaid in 15 yearly equal installments. Find the installment amount that the company has to pay to the bank.
- A property was purchased by a property manager's client for $7,000, 000 with a $2, 000, 000 down payment and a 30 year. $ 5,000, 000 loan with a 7% interest rate. Grous potential income (GPI) for the property is expected to be $850, 000 in year one. Operating expenses are expected to be $350,000 in year one. Both are expected to increase by 3% each year. The property is expected to sell at the end of year five at a 7% going-out capitalization rate with 5% costs of sale. The investor's required rate of returns 12%.Consider a new residential income producing property for sale to a potential investor. The sale price for the property is Sh. 1,250,000 of which building is Sh. 1 million and balance land. Building is depreciated over 50 years. Rent is estimated at Sh. 200,000 in the first year and is expected to grow at 3% p.a. thereafter. Vacancies and collection losses are expected to be 10% of rent. Operating expenses will be 31.5% of rent. A 70% mortgage loan can be obtained at 11% p.a. payable monthly for 30 years. The property is expected to appreciate in value at 3% per year and is expected to be owned for five years and then sold. Tax rate for both income and capital gains is 30%. Required Calculate the expected after tax IRR on equity invested. Is this investment viable if required rate of return is 15%?Give typing answer with explanation and conclusion to all parts Muddy Meadows Earthmoving can purchase a bulldozer for $150,000. After 7 years of use, the bulldozer should have a salvage value of $50,000. What depreciation is allowed for this asset in Year 4 for (a) Straight-line depreciation? (b) 150% declining balance depreciation? (c) 40% bonus depreciation with the balance using 5-year MACRS?
- An owner can lease her building for 100,000 per year for three years.aThe explicit cost of maintaining the building is cost 35,000 and the implicit cost is 50,000.All revenue are received and cost are borne at the end of each year.If the interest rate is 4 percent,determine the present value of the stream of: (I) accounting profit(II) ecenomic profitsBlaze Scooters is considering expanding into a new college town and has the following operating data: Initial Investment in scooters (year 0): $100,000 Cost of securing permits (assume that permit cost is a tax-deductible expense in year 1): $10,000 Anticipated Revenue: $150,000 for years 1-5. Depreciation of scooters - straight line down to 0 over 5 years. Operating expenses (not including Depreciation): $75,000 per year. Tax Rate: 21%. Net Working Capital, consisting of cash, spare parts inventory, accounts receivable, and accounts payable: $30,000. Blaze expects to be able to recoup 100% of Net Working if they shut down. Assume that investment in working capital occurs in year 0 at the start of the project. Scrap value of scooters at the end of 5 years: $20,000. (remember that any capital gains when selling are taxable) Assume that Blaze makes the necessary investments, operates for 5 years, and then shuts down, selling the scooters for scrap and recouping Net Working Capital. What…Chris invested $300K to buy a farmland. The expected yearly revenue is assessed as $67K if farmland remain productive for 10 years. The maintenance and operating costs expected to be $3k/year with an $600 yearly increase. What is the rate of return if the selling value of the farmland after 10year is $20K? Hint : try for i=15% and i=18% for the interpolation. (MUST solve it manually by showing deatiled calculation)