Let's say you are an Uber driver that owns your car. You paid $10,000 for it 4 years ago. AS a new car, it sold for $15,000 6 years ago. In 5 years, you plan to quit and sell the car. You expect to sell it to CarMax for $7,000. Since you were running it as a business, you have kept track of the depreciated tax value which will be $2,000 in 5 years. Your tax rate is 20%. Assume a discount rate of 6%. What is the present value of your terminal cash flow? Round to the nearest dollar and use the $ symbol. Hint...the last digit is 4.
Let's say you are an Uber driver that owns your car. You paid $10,000 for it 4 years ago. AS a new car, it sold for $15,000 6 years ago. In 5 years, you plan to quit and sell the car. You expect to sell it to CarMax for $7,000. Since you were running it as a business, you have kept track of the depreciated tax value which will be $2,000 in 5 years. Your tax rate is 20%. Assume a discount rate of 6%. What is the present value of your terminal cash flow? Round to the nearest dollar and use the $ symbol. Hint...the last digit is 4.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Let's say you are an Uber driver that owns your car. You paid $10,000 for it 4 years ago. AS a new car, it sold for $15,000 6 years ago. In 5 years, you plan to quit and sell the car. You expect to sell it to CarMax for $7,000. Since you were running it as a business, you have kept track of the
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education