**Required information:**Kevan, Jerry, and Dave formed Albee LLC. Jerry and Dave each contributed $245,000 in cash. Kevan contributed the following assets:| | Basis | Fair Market Value ||----------|----------|-------------------|| Kevan: | | || Cash | $15,000 | $15,000 || Land* | $120,000 | $440,000 || Totals | $135,000 | $455,000 |*Nonrecourse liability secured by the land equals $210,000.Each member received a one-third capital and profits interest in the LLC.**Note:** Leave no answer blank. Enter zero if applicable. Round to the nearest whole thousand.**Question f:**If the lender holding the nonrecourse liability secured by Kevan’s land required Kevan to guarantee 1/3 of the liability and Jerry to guarantee the remaining 2/3 of the liability when Albee LLC was formed, how much gain or loss will Kevan recognize?**Answer:**The answer is marked as complete but not entirely correct.- Gain or loss recognized: **$0**

Answered: 35,000 $455,000 Ey secured by the land…

Business

Accounting

35,000 $455,000 Ey secured by the land equals

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Year 0 $10,000.00 1 $ 3,000.00 Project A Cash Flow Project B Cash Flow $11,000.00 $5,000.00 2 $…

A: Step 1: The calculation of NPV, IRR, and MNPV ABCD1YearProject AProject BFV Project A @ 21%20…

Q: Net present value Using a cost of capital of 11%, calculate the net present value for the project…

A: NPV can be calculated by following function in excel=NPV(rate,value1,[value2],…) + Initial…

Q: The debt capacity for Omicron's new project in year O is closest to: $50.00 million $67.25 million…

A: Debt capacity represents a measure of the amount of debt that is provided to the business by the…

Q: Bhupatbhai

A: The objective of this question is to find the cost of capital at which the Net Present Value (NPV)…

Q: alculate the cumulative cash position. fen birini seçin: a.4.28 0 b.2.21 c.3.21 d.3.56 Unit…

A: Is the period required to recover the initial amount of investment of the project without…

Q: What is the project's MIRR? r = 10.00% 0 -$875 Year Cash flows O a. 22.51% O b. 11.75% O c. 17.21% O…

A: YearsCash Flows0($875)1$3002$3203$3404$360Rate10%Required:Modified Internal Rate of Return =?

Q: Initial investment............... $80,000 Annual after-tax cash inflow............. ?…

A: The net present value method is used to evaluate the investment projects. We can evaluate the…

Q: Sinking Fund MethodGiven:FC = 2,000,000.00 pesosSV = 300,000.00 pesosi = 12.00%n = 9 yearsa. A = ?b.…

A: Sinking Fund Method Sinking fund method is another useful method to calculate the depreciation for…

Q: $1897 mibns 000,0062 sw I Y al coles a bl 6) The Kaufmann Group is considering a $364,000 investment…

A: Present value= Sum of (Annual Net cash flow * Present value of $1 at 12%)

Q: Assume a $72,000 investment and the following cash flows for two alternatives: Year 1 Investment X…

A: The payback period is the amount of time it takes for the project to payback its initial investment.…

Q: 23. Assume the following three mutually exclusive projects, each requiring an initial outlay of…

A: NET PRESENT VALUE Net Present Value is one of the important Capital Budgeting Technique. Net Present…

Q: Project: German Year 0: -$650,000 Year 1: $220,000 Year 2: $240,000 Year 3: $245,000 Year 4:…

A: Net Present Value (NPV) is a financial metric used to evaluate the profitability of an investment by…

Q: The project's NPV? WACC: 10.00% Year 0 1 2 3 Cash flows -$1,000 $450…

A: The NPV is based on discounted cash flows. The NPV provides the information of net cash flows…

Q: Based on the above after tax cash flows, what is the NPW of this project if the interest rate is…

A: Net present value (NPV) is used to determine the present value of all future cash flows. Net present…

Q: Bruin, Incorporated, has identified the following two mutually exclusive projects: Year Cash Flow…

A: The discount rate is 10%.

Q: Carmona & Co. is considering the implementation of the following two, mutually exclusive projects:…

A: Internal rate of return is the modern method of capital budgeting that is used to determine the…

Q: Air Scrubbers Furnace Fuel Change: Initial Investment $ 1.350,000 $ 385.000 Annual Net Cash Flows $…

A: Part 2: Explanation:Step 1: Calculate the Present Value of Annual Net Cash Flows:To calculate the…

Q: Agape Mining Inc. is evaluating a project with the following cash flows: Year Cashflow 0…

A: Investment analysis refers to finding the financial feasibility of an investment through the usage…

Q: Blinding Light Company has a project available with the following cash flows: Year Cash Flow 0 1 2 3…

A: In this question, we are required to determine the Internal Rate of Return (IRR) using the following…

Q: Payback period (years): Round answers 2 decimal places. Accounting rate of return; Round answers to…

A: The decision about the choosing of best proposal among mutually exclusive projects depends upon the…

Q: If the property before tax cashflow (PBTCF) in a given year is $125,000, total debt service is…

A: The Equity after tax cash flow of the investor is that income after deducting all expenses and tax.

Q: 2. Whale Wash Limited issued eleven-year bonds one year ago at a coupon rate of 7.5%. The bonds have…

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Q: The project's IRR? Year 0 1 2 3 4 5 Cash flows -$8,750 $2,000…

A: Internal Rate of Return (IRR) of the project is the rate which the the Net Present Value (NPV) of…

Q: Raghubhai

A: The objective of the question is to restate the given net cash flows in real terms and then discount…

Q: Year 0 Cash Flow = +$25,000 (assume only 1 change in signs) Project IRR = 4.5% %3! Project DR = 6.0%…

A: Given: Project IRR = 4.5% Project Discount rate = 6%

Q: Sensitivity analysis: Boulder Creek Industries Boulder Creek Industries is considering an investment…

A: Hey, since there are multiple sub-parts posted, we will answer first three sub-parts. If you want…

Q: 16. For the following project calculate the Net Present Value. The cost of capital is 12% Initial…

A: present value formula: net present value =-initial value+future value1+rn where, r= rate of interest…

Q: Required: 1. Compute Project Y's annual net cash flows.

A: Net cash flows can be described as all cash inflows net of cash outflows during a given period. Net…

Q: The answers to the question is either A. $0 B. $30,000 C. $42,000 or D. $60,000

A: The basis of property is generally the cost or other basis (such as fair market value or inherited…

Q: Agape Mining Inc. is evaluating a project with the following cash flows: Year 0 1 2 3 4 5 6 7 8 o…

A: Capital budgeting is the process that businesses use to evaluate potential investments in long-term…

Q: Income from Net Cash Year Operations Flow $100,000 $180,000 2 40,000 120,000 40,000 100,000 10,000…

A: Net present Value (NPV) is the contrast between the current estimation of money inflows and the…

Concept explainers

Fringe Benefit Tax

Fringe benefits are in addition to the compensation that companies give to their employees. It is an additional benefit above the stated salary. It helps to keep the employees of the firm motivated as sometimes the only salary is not enough to retain the quality employees of the firm. There are different types of fringe benefits. Fringe benefits are given in both private as well as public enterprises.

Question

100%

**Required information:**

Kevan, Jerry, and Dave formed Albee LLC. Jerry and Dave each contributed $245,000 in cash. Kevan contributed the following assets:

| | Basis | Fair Market Value |
|----------|----------|-------------------|
| Kevan: | | |
| Cash | $15,000 | $15,000 |
| Land* | $120,000 | $440,000 |
| Totals | $135,000 | $455,000 |

*Nonrecourse liability secured by the land equals $210,000.

Each member received a one-third capital and profits interest in the LLC.

**Note:** Leave no answer blank. Enter zero if applicable. Round to the nearest whole thousand.

**Question f:**

If the lender holding the nonrecourse liability secured by Kevan’s land required Kevan to guarantee 1/3 of the liability and Jerry to guarantee the remaining 2/3 of the liability when Albee LLC was formed, how much gain or loss will Kevan recognize?

**Answer:**

The answer is marked as complete but not entirely correct.

- Gain or loss recognized: **$0**

Expert Solution

Step 1

Answer :

Calculate gain or loss Kevan will recognize :

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Kk316.
Five mutually exclusive projects had the following data: V W X Y Z NPV $(3,000) $56,000 $23,000 $14,000 $28,000 IRR 7% 10% 15% 13% 6% Which project is preferred?
The following information is provided by Doppler Systems: Project A Project B Project C Project D Initial investment $440,000 $202,000 $550,000 $506,000 PV of cash inflows $570,000 $394,000 $816,000 $406,000 Payback period (years) 3.6 3.2 4.0 20 NPV of project $130,000 $192,000 $266,000 $100,000 Calculate the profitability index for Project A. (Round your answer to two decimal places.) 1.09 1.67 0.85 1.30
17
D Open recovered wor x✓ fx 0 A B C D E F OMEGA PROJECT CASH FLOW INFORMATION Year Inflow Outflow = Newflow 0 1 2 3 G -$225,000 -$190,000 $150,000 $190,000 $215,000 $175,000 $197,000 $70,000 $582,000 $225,000 0 $190,000 $150,000 0 $220,000 $30,000 4 $215,000 0 5 $205,000 $30,000 6 $197,000 0 7 $100,000 $30,000 Total $1,087,000 $505,000 Required ROI 18% Project Omega NPV (Year 0) Project Omega Total NPV Which of the two projects would you fund and why? ▶ 3T Company Data + Ready have on project selection? (Reference Section 2.4, pg 38-39) 19 MAY 910 30 H NPV I K L M N O ALPHA PROJECT CASH FLOW INFORMATION Year Inflow Outflow = 0 1 $50,000 2 $150,000 3 $250,000 4 $250,000 5 $200,000 6 $180,000 7 $120,000 Total $ 1,200,000 Required ROI Project Alpha NPV (Year 1). Project Alpha NPV 1 tv $300,000 $100,000 0 $50,000 0 $50,000 0 $30,000 $530,000 18% d P Newflow -$300,005 -$50,000 $150,000 $200,000 $250,000 $150,000 $180,000 $90,000 $670,000 A Q NPV
Answer all the questions QUESTION 1 Questions a. After-tax cash flows for two mutually exclusive projects (with economic lives of four years each) are: Y Year Project X Project K(12,000) 5,000 01234 5,000 5,000 5,000 i. ii. iii. K(12,000) 0 0 0 25,000 The company's cost of capital is 10 percent. Compute the following: The internal rate of return for each project. The net present value for each project. Which project should be selected? Why? b. A firm is considering the purchase of an automatic machine for K6,200. The machine has an installation cost of K800 and zero salvage value at the end of its expected life of five years. Depreciation is by the straight-line method with the half-year convention. The machine is considered a five-year property. Expected cash savings before tax is K1,800 per year over the five years. The firm is in the 40 percent tax bracket. The firm has determined the cost of capital (or minimum required rate of return) as 10 percent after taxes. Should the firm…
None
10B
Question: 1. Fair Hevan Mutual fund cooperation provides investment services over 10-year period. The table below has information on some of the mutual funds they holds. Fund A C D Number of funds 9651 2752 1490 3045 Total return (%) 4.7 18.5 11.6 6.9 Based on number of funds in each category, Calculate the weighted average total return. 2. What are the other possible measures for weights, if number of mutual funds is not the best option. 3.Based on the following details on investment, calculate the expected retrun of the portfolio.