Exercise Drill No. 1: Return of capital and Return on capitalIndicate the amount representing return of capital or return on capital:ConsideratioReturn OFReturn ONFor the loss ofCapitalCapitalnP 1,000,000 HealthP 500,000 P 400,000 carP 300,000 P 350,000 building600,000 IncomeP 1,200,000 Life1.2.3.4.P5. Exercise Drill No. 2: Income tax and transfer taxCheck the box where each of the following items is taxable:IncomeTransferTransactionТаxТах1. Barter of properties2. Sale of goods3. Rendering of services4. Donation of properties5. Transfer of properties from a decedent tothe heirs upon death6. Transfer for less than full and adequateconsideration

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Answered: Exercise Drill No. 1: Return of capital…

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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Which of the following would be considered a simple investment? Net Cash Net Cash Flow 1 Flow 2 n 0 1 2 3 4 -1000 -1000 100 5000 -100 O Net Cash Flow 1 O Net Cash Flow 2 O Net Cash Flow 3 O None of these Net Cash Flow 3 -2000 0 -1000 3000 2000 -3000 500 -100 500 500
Consider the following sets of investment projects n(years) A($) B($) C($) D($) 0 -3,500 -5,800 -5,200 -40,000 1 600 3,000 2,000 12,000 2 600 2,000 4,000 14,000 3 1,000 1,000 2,000 18,000 4 1,000 500 4,000 18,000 5 1,000 500 2,000 14,000 Compute the equivalent annual worth of each project at i=10% and determine the acceptability of each project.
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
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