PRINCIPLES OF TAXATION F/BUS...(LL)
23rd Edition
ISBN: 9781260433197
Author: Jones
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 3, Problem 2AP
a.
To determine
Calculate
b.
To determine
Calculate net present value (NPV).
c.
To determine
Calculate net present value (NPV).
d.
To determine
Calculate net present value (NPV).
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Use the present value tables in Appendix A and Appendix B to compute the NPV of each of the following cash inflows:
Required:
a. $110,000 received at the end of six years. The discount rate is 6 percent.
b. $4,800 received annually at the end of each of the next 15 years. The discount rate is 7 percent.
c. A 10-year annuity of $7,000 per annum. The first $7,000 payment is due immediately. The discount rate is 6 percent.
d. $38,750 received annually at the end of years 1 through 5 followed by $31,250 received annually at the end of years 6 through 10.
The discount rate is 13 percent.
Note: For all requirements, round discount factor(s) to 3 decimal places, all other intermediate calculations and final answers to
the nearest whole dollar amount.
a. Net present value
b. Net present value
c. Net present value
d. Net present value
$
$
$
$
Amount
77,530
32,377
249,360
249,360
A lump sum S deposited into either fund X or fund Y will be exactly sufficient to provide a perpetuity of $100 per year with the first payment due at the end of one year.
Fund X will earn interest at an effective annual rate of 10% for the first 30 years and 6% thereafter.
Fund Y will earn interest at a level effective annual rate of j.
In which of the following ranges is j?
someone help?
Compute the present value of an annuity of $621 per year for 25 years, given a
discount rate of 6 percent per annum. Assume that the first cash flow will occur one
year from today (that is, at t = 1).
Round your answer to 2 decimal places; record your answer without commas and
without a dollar sign.
Your Answer:
Answer
Chapter 3 Solutions
PRINCIPLES OF TAXATION F/BUS...(LL)
Ch. 3 - Does the NPV of future cash flows increase or...Ch. 3 - Explain the relationship between the degree of...Ch. 3 - Does the after-tax cost of a deductible expense...Ch. 3 - Prob. 4QPDCh. 3 - Prob. 5QPDCh. 3 - Prob. 6QPDCh. 3 - Prob. 7QPDCh. 3 - Which type of tax law provision should be more...Ch. 3 - In the U.S. system of criminal justice, a person...Ch. 3 - Identify two reasons why a firms actual marginal...
Ch. 3 - Prob. 11QPDCh. 3 - Prob. 12QPDCh. 3 - Prob. 1APCh. 3 - Prob. 2APCh. 3 - Prob. 3APCh. 3 - Use a 5 percent discount rate to compute the NPV...Ch. 3 - Consider the following opportunities: Opportunity...Ch. 3 - Prob. 6APCh. 3 - Refer to the income tax rate structure in the...Ch. 3 - Prob. 8APCh. 3 - Company N will receive 100,000 of taxable revenue...Ch. 3 - Prob. 10APCh. 3 - Investor B has 100,000 in an investment paying 9...Ch. 3 - Firm E must choose between two alternative...Ch. 3 - Company J must choose between two alternate...Ch. 3 - Firm Q is about to engage in a transaction with...Ch. 3 - Corporation ABC invested in a project that will...Ch. 3 - Prob. 16APCh. 3 - Investor W has the opportunity to invest 500,000...Ch. 3 - Prob. 18APCh. 3 - Prob. 19APCh. 3 - Prob. 20APCh. 3 - Prob. 21APCh. 3 - Prob. 1IRPCh. 3 - Firm V must choose between two alternative...Ch. 3 - Prob. 3IRPCh. 3 - Refer to the facts in problem 3. Company WB is...Ch. 3 - Prob. 5IRPCh. 3 - Prob. 6IRPCh. 3 - Prob. 7IRPCh. 3 - Prob. 8IRPCh. 3 - Prob. 9IRPCh. 3 - Prob. 1TPCCh. 3 - Firm D is considering investing 400,000 cash in a...
Knowledge Booster
Similar questions
- Consider two streams of cash flows, A and B. Stream A's first cash flow is $10,000 and is received three years from today. Future cash flows in Stream A grow by 3 percent in perpetulty. Stream B's first cash flow is -$8,900, is received two years from today, and will continue in perpetuity. Assume that the appropriate discount rate is 11 percent. a. What is the present value of each stream? (A negative amount should be indicated by a minus sign. Do not round Intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Stream A Stream B b. Suppose that the two streams are combined into one project, called C. What is the IRR of Project C? (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) IRR % c. What is the correct IRR rule for Project C? Accept the project if the discount rate is equal the IRR. O Accept the project if the discount rate is above the IRR. Accept the project if the discount rate is…arrow_forwardDetermine the present value of $250,000 to be received at the end of each of 4 years, using an interest rate of 5%, compounded annually, as follows: a. By successive computations, using the present value of $1 table in Exhibit 5. Round to the nearest whole dollar. First year 44,325 X Second Year Third Year Fourth Year Total present value b. By using the present value of an annuity of $1 table in Exhibit 7. Round to the nearest whole dollar. c. Why is the present value of the four $250,000 cash receipts less than the $1,000,000 to be received in the future? The present value is less due to i over the 4 years.arrow_forwardThe appropriate discount rate for the following cash flows is 8 percent compounded quarterly. Year Cash Flow 1 $ 930 2 1,010 3 0 4 1,600 What is the present value of the cash flows?arrow_forward
- Draw the necessary cash flow diagrams. Prob#1: Determine the present worth of an annual payment of P 4500.00 : If made at the beginning of the year for 12 years at 8% compounded annually. If made at the end of each month for 5 years at 4% compounded monthly. If 15 payments start at the end of year 4 at 6% compounded annually.arrow_forward3) Payments of $2500 made at the beginning of each semiannual period for 15 years at 4% compounded semiannually Find the amount of each payment to be made into a sinking fund so that enough will be present to accumulate the following amount. Payments are made at the end of each period. The interest rate given is per period. Please show all workings step by steparrow_forward3) Payments of $2500 made at the beginning of each semiannual period for 15 years at 4% compounded semiannually Find the amount of each payment to be made into a sinking fund so that enough will be present to accumulate the following amount. Payments are made at the end of each period. The interest rate given is per period. Please show all the workings.arrow_forward
- K Calculate the present value of the following future cash flows, rounding all calculations to the nearest dollar (Click the icon to view Present Value of $1 table) (Click the icon to view Present Value of Ordinary Annuity of $1 table) $12,000 received in five years with interest of 7% $12,000 received in each of the following five years with interest of 7% Payments of $7,000, $8,000, and $5,500 received in years 3, 4 and 5, respectively, with interest of 9% 11. 12. 13. 11. Calculate the present value of $12,000 received in five years with interest of 7% (Enter any factor amounts to three decimal places, X.XXX.) Present value X X Year 3 Year 4 Year 5 Total 12. Calculate the present value of $12,000 received in each of the following five years with interest of 7% (Enter any factor amounts to three decimal places, X.XXX.) Present value of an annuity X 13. Calculate the present value for payments of $7,000, $8,000, and $5,500 received in years 3, 4 and 5, respectively, with interest of 9%…arrow_forwardFind the future values of these ordinary annuities.Compounding occurs once a year.a. $500 per year for 8 years at 14%b. $250 per year for 4 years at 7%c. $700 per year for 4 years at 0%d. Rework parts a, b, and c assuming they are annuities due.arrow_forwardWhat is the present value of a stream of $800 cash payments, each to be made at the beginning of the next four years, with 10% annual compounding interest rate? Group of answer choices $4,084.08 $3,712.80 $2,789.48 $2,535.89arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage LearningEBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT