Return to questionAcme has branched out to rentals of office furniture to start-up companies. Consider a $4,700 desk. Desks last for six years and can bedepreciated immediately. ASsume that lease rates for old and new desks are the same and that Acme's pretax administrative costs are$370 per desk at the beginning of each year. The cost of capital is 10% and the tax rate is 21%. Lease payments are made in advance.that is, at the start of each year. The inflation rate is zero. Suppose a blue-chip company requests a six year financial lease for a $4.700desk. The company has just issued five-year notes at an interest rate of 7% per year.What is the break-even rate in this case? (Do not round intermediate calculations. Round your answer to 2 decimal places.)Answer is complete but not entirely correct.Break-even rate(1,148.62)Alaal

The break even rate is given as,

Answered: d new desks are the same ar pital is…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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An inusrcane company pays its agents 40% prrcent commisison om the first years premium and 5% in the second year. If the premiums are 500 bucks a year what is the total commission that will be paid during th two years (this is also for a test i have tomorrow so this is study practice)
The Melbo Foundation is contemplating the purchase of new equipment, which may potentially increase revenues by 25%. Currently, sales are R850,000 per year and cost of sales are 55% of sales. The equipment is expected to last for 5 years with no residual value (tax allowance granted is at 20% per year). The capex/ cost of equipment R257 500. The corporate tax rate is 28%. Calculate the estimated annual tax payment increase/decrease? R2,065 decrease R12,355 increase R12,075 decrease R2,625 increase
5) Tulip plc wishes to purchase a machine costing £800,000 with an expected life of four years and a residual value of £25,000. The company can claim capital allowances on a 25 percent reducing balance basis and pays corporation tax at an annual rate of 30 percent. All tax is paid one year in arrears. If Tulip plc has a cost of capital of 10 percent, what is the present value of the capital allowance tax benefits (to the nearest £1,000)? A) £199,000 B) £181,000 C) £165,000 D) £121,000
A company has two investment opportunities. Alternative 1 (Alt. 1) pays $10,000 (inflow) two years from now, and $20,000 (inflow) four years from now. Alternative 2 (Alt. 2) pays $6,500 (inflow) at the end of every year for five years. Interest is 8.14% compounded annually. Which is the preferable alternative? Round the values for PV to the nearest cent. TWO YEARS P/Y C/Y N I/Y PV PMT FV $ Alt. 1 = $ % Alt. 2 = $ $ FOUR YEARS % GA SA FIVE YEARS Write the Discounted Cash Flow (DCF) for Alt. 1 and Alt. 2. Enter positive values for Alt. 1, and Alt. 2, rounded to the nearest dollar. % Choice Select an answer →
Jesaki Bank offers a 10-year CD that earns 2.3% compounded continuously. If $10,000 is invested in this CD, how long will it take for the account to be worth $11,154? Round to the nearest tenth of a year. ____years
6. A machine could be purchased for £800,000; it would be used for 3 years and then sold for £580,000. It would qualify for capital allowances at 18% reducing balance basis with a balancing allowance or charge on disposal. The company pays tax at 20% and has a cost of capital of 10%. What is the present value of the tax cashflow at time 1, to the nearest £100? A £14,700 B £26,200 C £28,800 D £144,000
4
A machine could be purchased for £800,000; it would be used for 3 years and then sold for £580,000. It would qualify for capital allowances at 18% reducing balance basis with a balancing allowance or charge on disposal. The company pays tax at 20% and has a cost of capital of 10%. What is the tax cash flow at time 3, to the nearest £100? A £8,400 inflow B £8,400 outflow C £19,365 inflow D £19,365 outflow
not use of the excel
An investment of $1,000 earns annual interest of 5% (no capital gains). Assuming accrual taxes of 30%, the expected after-tax value of the investment in ten years is closest to: In Question 1, the tax drag in percentage terms is closest to:
Use the following information of the next 4 questions: Clayton Enterprise considers investing a total of $40,000 in Al automation. • This $40,000 will be 100% depreciated over the three-year life of the project. • The project will require an initial $10,000 investment in NWC and the tax rate is 20%. • At the end of the project's life, the fixed assets will be worth $20,000, and Clayton Enterprise will recover $8,000 that was tied up in working capital. • The OCF for the next 3 years is $32,000. Calculate the CFFA in Yr 0 O-40000 O-70000 O-60000 O-30000 -50000 Show Transcribed Text Calculate the CFFA in Yr 3: CFFA3 O 59000 O 57000 O 54000 O 56000 O 55000 O 58000
If you have $1,000,000 but you have to use it in the next 6 months. SPOT RATE 1S =30.50-31 B 6MTH SPOT RATE 15 = 32-33 B 6MTH FORWARD RATE 1$ -31.50-32 B Thai Interest Rate =3% US Interest Rate = 1% 2.1 What should you do to gain the profit? 2.2 What should be the 6' month spot rate?

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d new desks are the same ar pital is 10% and the tax rate is opose a blue-chip company r rest rate of 7% per year