The WSSU parking garage project: Last we checked, a parking garage costs $7,000 per spot. Suppose campus explores building a 1,000-spot parking garage anyway. If campus charges $350 per spot per year, for 40 years, what's the NPV, payback period, discounted payback period, profitability index, IRR and modified IRR? Use a project required rate of return of 11% and assume as WACC of 8%.

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Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.