Chapter 1, Problem 10P

Mary is considering opening a hobby and craft store. Mary plans to operate the business for six years. Mary requires a minimum 6% return on this investment. (Ignore income taxes in this problem). The data pertaining to her investment opportunity are: (see attached image). Mary plans to operate the business for six years. Mary requires a minimum 6% return on this investment. What is the total cash inflow that comes JUST in year 6? Do not include the annual cash flows from the earlier problem.

You are an employee of University Consultants, Ltd., and have been given the following assignment. You are to present an investment analysis of a small retail income-producing property for sale to a potential investor. The asking price for the property is $1,255,000 rents are estimated at $160, 500 during the first year and are expected to grow at 2.5 percent per year thereafter. The investor tells you she would like to know how tax considerations affect your investment analysis. You determine that the building represents 85 percent of value and would be depreciated over 39 years (use 1/39 per year, except year 1 depreciation is also multiplied by 11.5/12 to adjust for the mid month convention). The potential investor indicates that she is in the 37 percent tax bracket and has enough passive income from other activities so that any passive losses from this activity would not be subject to any passive activity loss limitations. Capital gains from price appreciation will be taxed at 20…

The Capital-Ideas Company is in its development stage and is deciding how to formally organize its business venture. The founder, Rolf Lee, is considering organizing as either a proprietorship or a corporation. He expects revenues to be $2 million next year with total expenses amounting to $1,625 million, resulting in a taxable income of $375,000. Rolf is interested in estimating his federal income tax liability based on the schedules contained in Figure 3.6.  Requirements:1.If the Capital-Ideas Company is organized as a corporation and all after-tax profits are paid out as dividends to Rolf Lee, what additional personal income taxes would be paid?2. What would be the marginal tax rate and the average tax rate on this personal income received from the corporation?

please answer within 30 minutes.

ary is considering opening a hobby and craft store. Mary plans to operate the business for six years. Mary requires a minimum 6% return on this investment. Ignore income taxes in this problem.) The data pertaining to her investment opportunity are: Cost of equipment                                                 $ 175,000 Working capital needed                                        $ 185,000 Annual cash inflow from sales                             $ 190,000 Annual cash outflow for operating costs              $ 145,000 Salvage value of equipment                                 $   20,000  Mary plans to operate the business for six years. Mary requires a minimum 6% return on this investment. What is the present value factor you will use for the net annual cash flows?

Sahara is an enterprising young woman (age 14). Her math tutoring service will generate $8,400 this year. She has her prior taxed earnings ($7,500) invested in a convertible bond fund that will generate 5% interest and 6% capital gains this year. How much of her income is taxable?

"Mr. and Mrs. Jerald own a dry cleaning business that generates $125,000 taxable income each year. For the past few years, the couple’s federal tax rate on this income has been 32 percent. Congress recently increased the tax rate for next year to 40 percent. Based on a static forecast, how much additional revenue will the federal government collect from Mr. and Mrs. Jerald next year? How much additional revenue will the government collect if Mr. and Mrs. Jerald respond to the rate increase by working harder and earning $140,000 next year? How much additional revenue will the government collect if Mr. and Mrs. Jerald respond to the rate increase by working less and earning only $110,000 next year? "

Maria Turner just graduated from college with a degree in accounting. She planned to enroll immediately in the master’s program at her university but has been offered a lucrative job at a well-known company. The job is exactly what Maria hoped to find after obtaining her graduate degree. In anticipation of master’s program classes, Maria already spent $450 to apply for the program. Tuition is $8,000 per year, and the program will take two years to complete. Maria’s expected salary after completing the master’s program is approximately $60,000. If she pursues the master’s degree, Maria would stay in her current home that is near the campus and costs $600 per month in rent. She also would remain at her current job that pays $25,000 per year. Additionally, Maria’s immediate family is nearby. She spends considerable time with family and friends, especially during the holidays. This would not be possible if she accepts the job offer because of the distance from her new location. The job…

Maria Turner just graduated from college with a degree in accounting. She planned to enroll immediately in the master's program at her university but has been offered a lucrative job at a well-known company. The job is exactly what Maria hoped to find after obtaining her graduate degree. In anticipation of master's program classes, Maria already spent $450 to apply for the program. Tuition is $8,000 per year, and the program will take two years to complete. Maria's expected salary after completing the master's program is approximately $60,000. If she pursues the master's degree, Maria would stay in her current home that is near the campus and costs $600 per month in rent. She also would remain at her current job that pays $25,000 per year. Additionally, Maria's immediate family is nearby. She spends considerable time with family and friends, especially during the holidays. This would not be possible if she accepts the job offer because of the distance from her new location. The job…