Clara operates a specialized financial services business in Toronto. She's currently considering purchasing an exclusive service agreement from a competitor for $110,000, but would like to ensure that the investment would meet her payback rule of five years. The service agreement would guarantee net returns of $32,000 per year, but would also require her to pay $16,000 for a regulatory audit every other year (starting from the first year). a. What is the payback period on this investment? Years? Months? (Round up to the next month) b. Does this investment satisfy Clara's payback rule? Yes/No Kindly use all the decimals. DO NOT ROUND

Clara operates a specialized financial services business in Toronto. She's currently considering purchasing an exclusive service agreement from a competitor for $110,000, but would like to ensure that the investment would meet her payback rule of five years. The service agreement would guarantee net returns of $32,000 per year, but would also require her to pay $16,000 for a regulatory audit every other year (starting from the first year). a. What is the payback period on this investment? Years? Months? (Round up to the next month) b. Does this investment satisfy Clara's payback rule? Yes/No Kindly use all the decimals. DO NOT ROUND

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter9: Deductions: Employee And Self-employed-related Expenses

Section: Chapter Questions

Problem 49P

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8. Clara operates a specialized financial services business in Toronto. She's currently considering purchasing an exclusive service agreement from a competitor for $110,000, but would like to ensure that the investment would meet her payback rule of five years. The service agreement would guarantee net returns of $32,000 per year, but would also require her to pay $15,000 for a regulatory audit every other year (starting from the first year). a. What is the payback period on this investment? year(s)? month(s)? b.Does this investment satisfy Clara's payback rule Yes/No Kindly keep all the decimals for all the procedures, DO NOT ROUND
4.4 Clara operates a specialized financial services business in Toronto. She's currently considering purchasing an exclusive service agreement from a competitor for $120,000, but would like to ensure that the investment would meet her payback rule of five years. The service agreement would guarantee net returns of $34,000 per year, but would also require her to pay $14,000 for a regulatory audit every other year (starting from the first year). a. What is the payback period on this investment? Years? Months? (Round up to the next month) b. Does this investment satisfy Clara's payback rule? Yes/No
6. Boilermaker Design, Inc. (BD) has an employment contract with its newly hired CEO. The contract requires a lump sum payment of $5 million be paid to the CEO upon the successful completion of her first three years of service. BD wants to set aside an equal amount of money at the end of each year to cover this anticipated payment and will earn 8% on the funds. How much must BD set aside each year for this purpose?
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1. How much must a man deposit in a bank that pays 7% compounded annually so that after 10 years he will have P3,000,000 2. How much must a corporation deposit in a bank which credits interest at 12% compounded monthly to come up in 8 years with P2,500,000 needed for its expansion program? 3. In purchasing of house, a man makes P720,000 down payment and agrees to pay P1,200,000 5 years later. Find the cash value of the house if money is worth 14% compounded semi-annually. 4. On the birth of a child, a father wished to invest in a trust fund which gives 12% compounded quarterly. How much must he invest if he wants to accumulate P650,000 by the time the child reaches his 21st birthday? 5. To provide for a purchase of a car worth P950,000 as a gift to his mother 5 years from now. How much should Benjamin invest today at 18% compounded quarterly? 6. Mrs. Dela Cruz invested P70,000 at 12% compounded quarterly for 5 years and another P70,000 at 18% compounded semi-annually for the…