jitu Donna just graduated from college. Since she is starting her own business, it's time to upgrade from her clunker to a reliable vehicle.Donna has the option to purchase a new car for her business at a cost of $27.222 (life of 7 years with no salvage value), estimating thatit would help her bring in additional annual net operating cash flows of $7,800 over the life of the car.Determine the simple payback period and the IRR for this investment. Donna expects her business income to be subject to a 30 % taxrate. (Round simple payback period to 3 decimal places, e.g. 15.256 and IRR to 2 decimal places, e.g. 15.25%. Round intermediate calculationsto 2 decimal places, e.g. 15.25.)Simple payback periodIRR3.490 years5.91%

The simple payback period refers to the time it takes for the cash flows of the project to cover its…

Answered: Donna just graduated from college.…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization

Section: Chapter Questions

Problem 79TPC

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Linda just graduated from college. Since she is starting her own business, it’s time to upgrade from her clunker to a reliable vehicle. Linda has the option to purchase a new car for her business at a cost of $31,416 (life of 7 years with no salvage value), estimating that it would help her bring in additional annual net operating cash flows of $7,700 over the life of the car.Determine the simple payback period and the IRR for this investment. Linda expects her business income to be subject to a 30% tax rate. (Round simple payback period to 3 decimal places, e.g. 15.256 and IRR to 2 decimal places, e.g. 15.25%. Round intermediate calculations to 2 decimal places, e.g. 15.25.) Simple payback period enter a number of years rounded to 3 decimal places Correct answeryears IRR enter percentages rounded to 2 decimal places %
Linda just graduated from college. Since she is starting her own business, it’s time to upgrade from her clunker to a reliable vehicle. Linda has the option to purchase a new car for her business at a cost of $31,416 (life of 7 years with no salvage value), estimating that it would help her bring in additional annual net operating cash flows of $7,700 over the life of the car.Determine the simple payback period and the IRR for this investment. Linda expects her business income to be subject to a 30% tax rate. (Round simple payback period to 3 decimal places, e.g. 15.256 and IRR to 2 decimal places, e.g. 15.25%. Round intermediate calculations to 2 decimal places, e.g. 15.25.) Simple payback period enter a number of years rounded to 3 decimal places years IRR enter percentages rounded to 2 decimal places %
Laura’s grandparents helped her purchase a small self-serve laundry business to make extra money during her five college years. When she completed her electrical engineering degree, she sold the business and her grandparents told her to keep the money as a graduation present. For the net cash flows (NCF) listed, determine:a. if the total income exceeded the total amount invested in 5 years (i = 0%).b. the actual rate of return over the 5-year period. c. how long it took to pay back the $75,000 investment plus a 7% per year return.d. answers to all three questions above using a spreadsheet.Year 0 1 2 3 4 5NCF, $1000 per year -75 -10.5 18.6 -2 28 105
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In order to buy a new car, you finance $20,000 with no down payment for a term of five years at an APR of 6%. After you have the car for one year, you are in an accident. No one is injured, but the car is totaled. The insurance company says that before the accident, the value of the car had decreased by 25% over the time you owned it, and the company pays you that depreciated amount after subtracting your $500 deductible.Suggestion: Use the following formula for the equity built up after k monthly payments. Equity = Amount borrowed × ((1 + r)k − 1) ((1 + r)t − 1) Can you pay off the loan using the insurance payment, or do you still need to make payments on a car you no longer have? Yes, you can pay off the loan using the insurance payment.No, you cannot pay off the loan using the insurance payment. If you still need to make payments, how much do you still owe? (Subtract the payment from the insurance company. Round your answer to the nearest cent. If you no longer…
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Ben bought a brand new bike costing P38,000 if paid in cash. However, she can purchase it on installment basis to be paid within 5 years. If money is worth 8% compounded annually, what is her yearly amortization if all payments will begin two years after the purchase? The answer here is 10278.73, kindly show your solution and the cash flow diagram thanks !
Oliver Douglas decides to install a fuel storage system for his farm that will save him an estimated 6.5 cents/gallon on his fuel cost. Initial cost of the system is $10,000, and the annual maintenance is $25 the first year, increasing by $25 each year thereafter. After a period of 10 years the estimated salvage is $3000. If money is worth 12%, what is the breakeven quantity of fuel?
After a bad accident Anton receives a large sum in compensation. He is thinking about using it to invest in a stretch limousine to hire out for special occasions. The cost of the limousine is £100,000. Anton is due to retire in six years, at which stage he thinks he will be able to sell the limousine for £40,000. The net cash inflows for the venture, after allowing for the driver's wages and other direct expenses are: End of year Net cash flow (£) 1 10,000 2 15,000 3 20,000 4 20,000 5 20,000 6 15,000 (a) Find the payback period for this venture. (b) Calculate the net present value using a discount rate of 8%.

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