Rakesh bhapa Problem C-2A Consider present value (LOC-2, C-3)Bruce is considering the purchase of a restaurant named Hard Rock Hollywood. The restaurant is listed for sale at $1,000,000. Withthe help of his accountant, Bruce projects the net cash flows (cash inflows less cash outflows) from the restaurant to be the followingamounts over the next 10 years:Years Amount1-6 $ 86,000 (each year)796,0008910106,000116,000126,000Bruce expects to sell the restaurant after 10 years for an estimated $1,160,000. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Useappropriate factor(s) from the tables provided. Round your answer to 2 decimal places.)Required:1-a. Calculate the total present value of the net cash flows if Bruce wants to make at least 10% annually on his investment. (Assume allcash flows occur at the end of each year.)Total present value

The present value is the formula that is used to determine the value of future money in current…

Problem C-2A Consider present value (LOC-2, C-3) Bruce is considering the purchase of a restaurant named Hard Rock Hollywood. The restaurant is listed for sale at $1,000,000. With the help of his accountant, Bruce projects the net cash flows (cash inflows less cash outflows) from the restaurant to be the following amounts over the next 10 years: Years Amount 1-6 $ 86,000 (each year) 96,000 106,000 116,000 7 8 9 10 126,000 Bruce expects to sell the restaurant after 10 years for an estimated $1,160,000. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Round your answer to 2 decimal places.) Required: 1-a. Calculate the total present value of the net cash flows if Bruce wants to make at least 10% annually on his investment. (Assume all cash flows occur at the end of each year.) Total present value

Problem C-2A Consider present value (LOC-2, C-3) Bruce is considering the purchase of a restaurant named Hard Rock Hollywood. The restaurant is listed for sale at $1,000,000. With the help of his accountant, Bruce projects the net cash flows (cash inflows less cash outflows) from the restaurant to be the following amounts over the next 10 years: Years Amount 1-6 $ 86,000 (each year) 96,000 106,000 116,000 7 8 9 10 126,000 Bruce expects to sell the restaurant after 10 years for an estimated $1,160,000. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Round your answer to 2 decimal places.) Required: 1-a. Calculate the total present value of the net cash flows if Bruce wants to make at least 10% annually on his investment. (Assume all cash flows occur at the end of each year.) Total present value

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter18: Accounting Periods And Methods

Section: Chapter Questions

Problem 10DQ

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answer is 4.3 years Please show your solution MANUALLY. don't use excel or financial calculator. Avalon Inc. is considering a new investment. The initial cost of the machinery is $184,000. Avalon expects the machinery to have a five-year useful life, with a $10,000 salvage value. Annual depreciation expense is computed as $34,800. Annual before-tax operating cash inflows are $67,000. Assume an effective tax rate of 30% and that all cash flows occur evenly throughout the year. Management has set a minimum required return of 12% for similar investments. Compute the discounted payback period in years for the potential investment.
The question number 1 I already aswered, please send me just the 2 question. Mack Company, HappyDay’s branch, plans to invest $50,000 in land that will produce annual rent revenue equal to 15 percent of the investment, starting on January 1, Year 3. The revenue will be collected in cash at the end of each year, starting December 31, Year 3. Mack can obtain the cash necessary to purchase the land from two sources. Funds can be obtained by issuing $50,000 of 10 percent, five-year bonds at their face amount. Interest due on the bonds is payable on December 31 of each year with the first payment due on December 31, 2021. Alternatively, the $50,000 needed to invest in land can be obtained from equity financing. In this case, the stockholders (holders of the equity) will be paid a $5,000 annual cash dividend. Mack Company is in a 30 percent income tax bracket. 1. Prepare an income statement and statement of cash flows for Mack Company…
Q - Akshu Cantrell Cash Flow: Year 5, Cash Flow $12,000 Year 4, Cash Flow $12,000Year 3, Cash Flow $11,000 Year 2, Cash Flow $11,000 Year 1, Cash Flow $10,500 Fuller Cash Flow: Year 5, Cash Flow $15,000 year 4, Cash Flow $14,000Year 3, Cash Flow $12,500 Year 2, Cash Flow $13,500 Year 1, Cash Flow $12,000 A home remodeling company is considering investing in two different house flips, Cantrell and Fuller. The company would like your help in determining which flip they should invest in. Assume the company uses a discount rate of 9 percent to analyze its projects. Use the Tableau Dashboard to assist in your analysis. Required: Calculate the net present value (NPV) of each house flip. Based on the NPV, which house(s) should the company pursue? Now assume the company has a limited amount to invest and must decide between Cantrell and Fuller. Which house should they select based on the NPV analysis?
B5. Garnette Corp is considering the purchase of a new machine that will cost $342,000 and provide the following cash flows over the next five years: $99,000, $88,000, $92,000, $87,000, and $72,000. Calculate the IRR for this piece of equipment. NOTE: Enter amounts rounded to two decimals (e.g., 78.76 or 40.00).
Solve question no. 5only 4. A business generates an annual income of$50,000and a salvage value of$500,000in 10 years. i=10% Que. 5. Determine IRR in problem 4 if you pay$490,000for the business. (percentage format) Answer ASAP with proper explanation .
Problem info: The text states, "Over sufficiently long time periods, net income equals cash inflows minus cash outflows, other than cash flows with owners." Demonstrate the accuracy of this statement in the following scenario: Two friends contributed $50,000 each to form a new business. The owners used the amounts contributed to purchase a machine for $100,000 cash. They estimated that the useful life of the machine was five years and the salvage value was $20,000. They rented out the machine to a customer for an annual rental of $25,000 a year for five years. Annual cash operating costs for insurance, taxes, and other items totaled $6,000 annually. At the end of the fifth year, the owners sold the equipment for $22,000, instead of the $20,000 salvage value initially estimated. (Hint: Compute the total net income and the total cash flows other than cash flows with owners for the five-year period as a whole. If it doesn't impact Net Income, don't include it.) Solutions needed:Journal…
For each of the following problems, (a) draw the cash flow diagram; (b) present clean and clear manual solutions to the problem; (c) highlight the final answer (only the final answer as required by the problem) by enclosing it within a box. An asset with an expected life of eight years is to be purchased for $10,000. Annual revenue is estimated at $5,000 with annual expenses of $1,00. At the end of the 8th year, the asset is expected to be sold for $2,000. The interest rate is 10%. Use the AW method to determine whether the asset should be purchased or not.
Following problem, (a) draw the cash flow diagram; (b) present clean and clear manual solutions to the problem; (c) highlight the final answer (only the final answer as required by the problem) by enclosing it within a box. A set of office equipment costs $80,000 and has a useful life of 8 years. Its estimated market value at the end of the 8th year is $2,000. Determine the depreciation amount on the 5th year and the book value at the end of the 3rd year using: Straight Line Method Double Declining Balance Method Sum-of-Years Digits Method Declining Balance Method with Switchover to SL MACRS GDS (assume that the assets will be disposed of on the 3rd year) NO EXCEL
D3) Calculate the cash flow on the sale of a piece of real estate that you held for 12 years. You purchased the property for $133000 and sold the property for $391000. The sales commission was split between the buyer and the seller. Use the following constants: Sales commission: 6%; Capital Gains Rate: 15%; Corporate Tax Rate: 28%; Income Tax Rate 25%
Question 2) A Company is planning to buy a new machinery for 175.000 dollars. This machinery will create cash inflows in a five-year period (economic life) as follows. There is no expected salvage value of machinery at the end its economic life. 1 50.000 dollars 2 60.000 3 65.000 4 40.000 5 30.000 a) Calculate the pay back period. b) Calculate the net present value (Assume the discount rate of the company is 10%) c) Make your decision and explain: Why? Present value of 1 dollar Period Discount rate (10%) 1 0,909 2 0,826 3 0,751 4 0,683 5 0,621
At the beginning of Year 1, Copeland Drugstore purchased a new computer system for $250,000. It is expected to have a five-year life and a $40,000 salvage value. Record the purchase of the computer system and the depreciation expense for the first year under straight-line and double-declining-balance methods in a financial statements model. (In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), a financing activity (FA) and net change in cash (NC). Enter any decreases to account balances and cash outflows with a minus sign. Not all cells in the "Statement of Cash Flows" column may require an input - leave cells blank if there is no corresponding input needed.)
DON'T USE AI, NO SOFTWARE 3. A company wishes to acquire a property with the following payment scheme: $1,250,000 in cash; $250,000 at the end of each quarter for 2 years and a final payment of $500,000, 3 months after your last quarterly payment. Calculate the total value of the land using 12% compounded quarterly.