Vern plans to invest $100,000 in a growth stock, in year 0. The stock is not expected to pay dividends. However, Vern predicts that it will be worth $135,000 when he sells it in year 3. The $35,000 increase in value will be taxable at the preferential capital gains rate of 15 percent.

Required:
a. Using a 4 percent discount rate, calculate the net present value of after-tax cash flows from this investment. (Round discount factor(s) to 3 decimal places. Round your intermediate calculations and final answer to the nearest whole dollar amount.)
b. Which two of the four basic tax planning variables increase the value of Vern's investment?

Answers

Answer 1

Answer:

a) $15,347

b) Time period

Character

Explanation:

Initial investment = $100,000

Tax payable = ( 135,000 - 100,000 ) * 15%

                     = 35,000 * 0.15 = $5250

Amount receivable after tax = $135,000 - $5250 = $129,570

n  = 3 years

a) Using a 4% discount rate calculate NPV

NPV = 129570 / ( 1 + 0.04 )^3 - Initial investment

        = 129570 / ( 1.04 )^3 - 100,000

        ≈  $15,347

b) The two basic tax planning variables that increases the value of Vern's investment

Time period Character

Related Questions

Assume Argentina has production possibilities to produce either 35 batches of apples or 70 batches of peaches using 100 worker hours. If it chooses to produce 15 batches of apples, how many batches of peaches can it produce

Answers

Answer:

40

Explanation:

Batches of apples produced in one hour = 35/100 = 0.35

Batches of peaches produced in one hour = 70/100 = 0.70

total hours it would take to produce 15 batches of apples = 15 / 0.35 = 42.86 =  43 hours

this would leave (100 - 43) 57 hours to make peaches

Batches of peaches that can be made in 43 hours = 57 x 0.7 = 39.9 = 40 batches

Robo Hot Inc., is a company that markets electric heaters to hospitals. Mr. Heatmizer, it's CEO, would ike to reduce its inventory cost by determining the optimal number of electric heaters to obtain per order. The annual demand is 100,000 units and the ordering cost is $10 per order. The carrying cost per unit is $2.00. Using these figures, calculate the expected number of orders per year.

Answers

Answer:

Expected number of orders=31.6 orders per year

Explanation:

The expected number of orders would be the Annual demand divided by the economic order quantity(EOQ).

The Economic Order Quantity (EOQ) is the order quantity that minimizes the balance of holding cost and ordering cost. At the EOQ, the holding cost is exactly the same as the ordering cost.

It is calculated as follows:

EOQ = (2× Co D)/Ch)^(1/2)

Co- ordering cost Ch - holding cost, D- annual demand

EOQ = (2× 10 × 100000/2)^(1/2)= 3162.27 units

Number of orders = Annual Demand/EOQ

                              = 100,000/3,162.27= 31.62 orders

Expected number of orders=31.6 orders per year

assume a model with an ordinary upward sloping aggregate supply curve and a downward sloping aggregate demand curve. what are the effects pf an increase in aggregate supply

Answers

Answer: e. Real GDP increases and the price level falls.

Explanation:

When the Aggregate Supply increases in the economy, there will be more goods and services for people to patronize. This will lead to a fall in price as per the rules of demand and supply so the general price level will fall as aggregate measures affect the entire economy.

At the same time, real GDP will increase because a higher Aggregate supply means that more goods and services are being produced in the economy which is how Real GDP increases.

If demand for reserves is predected to increase temporarily, the manager of the trading desk at the New York Fed bank will likely conduct ________ open market operations to ________ reserves.

Answers

Answer:4.1

Explanation:

For the past year, Kayla, Inc., has sales of $46,382, interest expense of $3,854, cost of goods sold of $16,659, selling and administrative expense of $11,766, and depreciation of $6,415. If the tax rate is 35 percent, what is the operating cash flow

Answers

Answer:

$15,266

Explanation:

Sales                                                          $46,382

Less: Cost of goods sold                          $16,659

Gross profit                                                $29,723

Less: Selling & administrative expense   $11,766

Less: Depreciation                                     $6,415

Earnings before interest and tax (EBIT)    $11,542

Less: Interest expenses                             $3,854

Earnings before tax (EBT)                           $7,688

Less: Tax expenses  (7688*35%)               $2,691

Earnings after tax                                       $4,997

Operating cash flow = EBIT + Depreciation expenses - Tax expenses

Operating cash flow = $11,542 + $6,415 - $2,691

Operating cash flow = $15,266

Imagine you have $30 to spend. You are thinking of buying new soccer shoes because yours
are worn out and a new video game. Which of these do you want, and which of these do you
need? Explain your answer.
Plz no links to answer

Answers

Answer:

video game

Explanation:

because I don't go outside, I'm a gamer

Ford Motor Co. asks members of its target market to rate its cars and those of General Motors and Chrysler on a 7-point scale in terms of two dimensions (comfortable seats and engine power) so that it can establish a quadrant-grid map of these ratings. What type of analysis is Ford conducting

Answers

Answer: Positioning

Explanation:

The analysis that Ford is using is positioning. Positioning analysis refers to the process of analyzing how the brand of a company is perceived by the marketplace.

It should be noted that when target market opportunities are identified, a company should make a comparison between the way that the brand is perceived and needs of the targeted market

At Sheridan Electronics, it costs $30 per unit ($16 variable and $14 fixed) to make an MP3 player that normally sells for $49. A foreign wholesaler offers to buy 4,570 units at $25 each. Sheridan Electronics will incur special shipping costs of $1 per unit. Assuming that Sheridan Electronics has excess operating capacity, indicate the net income (loss) Sheridan Electronics would realize by accepting the special order.

The special order should be:________

Answers

Answer:

                                                    Reject        Accept               Net Income

                                                     order         order      increase / (decrease)

Revenues                                       $0           $114,250           $114,250

                                                                     (4570*25)

Cost - variable manufacturing      $0           $73,120            ($73,120)

                                                                      (4570*16)

Shipping                                         $0          $4,570              ($4,570)

                                                                      (4570*1)

Net Income                                    $0           $36,560            $36,560

So, the special order should be accepted.

Andrea Apple opened Apple Photography on January 1 of the current year. During January, the following transactions occurred and were recorded in the company's books:

1. Andrea invested $15,400 cash in the business in exchange for common stock.
2. Andrea contributed $39,000 of photography equipment to the business.
3. The company paid $4,000 cash for an insurance policy covering the next 24 months.
4. The company received $7,600 cash for services provided during January.
5. The company purchased $8,100 of office equipment on credit.
6. The company provided $4,650 of services to customers on account.
7. The company paid cash of $3,400 for monthly rent.
8. The company paid $5,000 on the office equipment purchased in transaction

Based on this information, the balance in the A. Apple, Capital account reported on the Statement of Owner's Equity at the end of the month would be:________

Answers

Answer:

the ending balance of an equity is $63,250

Explanation:

The computation of the ending balance of equity is shown below:

Cash Invested $15,400      

Photography equipment contributed $39,000      

Service revenue for cash $7,600

Service revenue on account     $4,650      

Monthly rent paid  -$3,400      

Ending balance of an equity $63,250

Hence, the ending balance of an equity is $63,250

The most important reason the selection committee should review the job
description before screening applications is to ensure that———.

A. the salary matches the job description
B. they do not select an overqualified candidate
C. the screening criteria matches the job requirements
D. the correct key words are used to screen the applications
SUBMIT

Answers

Answer: This might help.

Explanation: Look up chapter 6: selection flash cards.

Selecting a CD. Casey has $1,000 to invest in a certificate of deposit. Her local bank offers her 2.5% on a 12-month FDIC-insured CD. A nonfinancial institution offers her 5.2% on a 12-month CD. What is the risk premium

Answers

Answer: 2.7%

Explanation:

A risk premium simply means the investment return thstna particular asset will be expected to yield which is in excess of the assets risk-free rate of return.

The risk premium will be:

= Total return - Risk free rate

= 5.2% - 2.5%

= 2.7%

Therefore, the risk premium is 2.7%.

Marx, Inc. has a net income of $600,000 for 2012, and there are 400,000 weighted-average shares of common stock outstanding. Dividends declared and paid during the year amounted to $80,000 on the preferred stock and $120,000 on the common stock. The earnings per share for 2012 is Group of answer choices

Answers

Answer:

$1.3

Explanation:

Net income = $600,000

Outstanding shares = 400,000

Dividends paid = $80,000

So, by using  earning per share formula,

Earning per share = (Net income - Dividends paid) ÷ outstanding shares

By putting the value, we get

Earning per share = ($600,000 - $80,000) ÷ 400,000

= $520,000 ÷ 400,000

= $1.3

Hence, the earning per share for 2012 is $1.3.

Hallie painted a picture and wanted to make it available for sale on the
Internet. How can she best protect her work from intellectual property theft?
O A. Hire a security guard
B. Hire an intellectual property lawyer
C. Add a watermark
a
O D. Change her password

Answers

Answer:

c adding a watermark they cannot remove it if they copy picture off the internet.

The correct option is C.

What does a watermark mean?

Watermarking is the process of superimposing a logo or piece of text atop a document or image file, and it's an important process when it comes to both the copyright protection and marketing of digital works.

What is a watermark on a photo?

A watermark is a logo, piece of text, or signature superimposed onto a photograph. Watermarks are typically transparent, so those viewing the image can still admire it. You can usually identify the photographer through the watermark, too.

Learn more about watermark ​here https://brainly.com/question/24206908

#SPJ2

Because leaders need to devise effective solutions in short time spans with limited information, they need to have Multiple Choice interpersonal abilities. conceptual skills. business skills. strategic skills. cognitive abilities.

Answers

Answer:

cognitive abilities.

Explanation:

Cognitive abilities can be regarded as skills that is a brain-based, and it's abilities that is required in carrying out different tasks, this could range from the simplest task to most complex ones. Cognitive abilities can be attributed to mechanisms of learning, remembering as well as problem-solving. It should be noted that as leaders need to devise effective solutions in short time spans with limited information, they need to have cognitive abilities.

can you have a sloth as a pet

Answers

Answer:

in most places yes

Explanation:

they are hard to care for tho

Answer:

i mean Ig it depends on if you need a license or have to pay alot for it

have a good day :)

Explanation:

9. OMG Corporation just paid a $1.50 annual dividend on each share. It is planning on increasing its dividend by 15 percent a year for the next 4 years. The corporation will then decrease the growth rate to a rate of 4 percent per year, and keep it that way indefinitely. The required rate of return is 7.00 percent. Calculate the current value of one share of this corporation's stock.

Answers

The current value of one share of the corporation's stock is $76.59.

What is the value of the stock?

The two-stage dividend model would be used to determine the value of the stock.  In the two-stage dividend growth model, the first stage is characterised by a fast growth rate which becomes steady in the second stage.

Dividend in Y1 = 1.50 x 1.15 = 1.725Dividend in Y2 = 1.50 x 1.15^2 = 1.98Dividend in Y3 = 1.50 x 1.15^3 = 2.28Dividend in Y4 = 1.50 x 1.15^4 = 2.62Dividend in Y4 = (2.62 X 1.04) / (0.07 - 0.04) = 90.95

Find the present value of these cash flows

Value of the stock = $76.59

To learn more about the two stage dividend model, please check: https://brainly.com/question/26564273

4. Both the concentration and Herfindahl indices computed by the U.S. Bureau of Census tends to overstate the actual level. In addition, they understate the degree of concentration in local markets (gasoline, for example). Explain why we make these statements.

Answers

Answer:

The use of data aggregation leads to overstatement of the  concentration and Herfindahl indices

while the use of National/state data leads to understatement of the degree of concentration in local markets.

Explanation:

The ratio of concentration and Herfindahl indices computed are mainly made up of foreign players while  the contributions of small local unorganized players are not considered, which leads to the increase in the value of  indices and ratios been used, ( i.e. The use of data aggregation ) .  hence the overstatement of the actual level.

The understatement of the degree of concentration in local markets happens because of the use of national and state data while computing the concentration in the local markets like gasoline and this is mainly caused by the presence of fewer industries in the market. The state and national data does not reflect the true concentration in the local market hence the degree of concentration is understated at the local level.

Financial statement data for the years 20Y5 and 20Y6 for Black Bull Inc. follow: 20Y5 20Y6 Net income $1,538,000 $2,485,700 Preferred dividends $50,000 $50,000 Average number of common shares outstanding 80,000 shares 115,000 shares a. Determine the earnings per share for 20Y5 and 20Y6. Round to two decimal places. 20Y5 20Y6 Earnings per Share $fill in the blank 1 $fill in the blank 2 b. Is the change in the earnings per share from 20Y5 to

Answers

Answer:

1. Earnings per share = (Net income - Preferred Dividend) / Average Common Stock EPS

Earnings per share 20Y5 = (1538000 - 50000) / 80000

Earnings per share 20Y5 = $18.60

Earnings per share 20Y6 = (2485700 - 50000) / 115000

Earnings per share 20Y6 = $21.18

2. The charnge in EPS is Favourable because there is increase in Earnings per share over the year.

C Corporation reported accounts receivable balance 600 at the beginning of the year and 850 at the end of the year. Allowance for bad debts was 20 at the beginning of the year and 25 at the end of the year. Sales revenues were $1,900 and bad debt expense was $28 for the year. Net income for the year was $500. How much cash was collected from customers on account

Answers

Answer: $1,627

Explanation:

Cash collected from customers on account is:

= Beginning accounts receivable + Sales - Ending accounts receivable - Bad debt written off

Bad debt written off = Beginning allowance + Bad debt expense for the year - ending allowance

= 20 + 28 - 25

= $23

Cash collected:

= 600 + 1,900 - 850 - 23

= $1,627

. Confusion Corp is expected to pay a dividend of $2 in the upcoming year. The risk-free rate of return is 4%, and the expected return on the market portfolio is 14%. Analysts expect the price of Confusion Corp shares to be $22 a year from now. The beta of Confusion Corp's stock is 1.25. What is the intrinsic value of Confusion's stock today

Answers

Answer:

$20.60

Explanation:

Required Return of Stock = Risk free Rate + Beta*(Expected Return of market - Risk free Rate)

Required Return of Stock = 16.5% (4% + 1.25*(14% - 4%)), Expected Dividend in upcoming year(D1) = $2, Expected Price 1 years from now(P1) = $22

Intrinsic value of Confusion's stock today (P0):

P0 = (D1 + P) /  (1 + Ke)^1

P0 = (2 + 22) (1 + 0.165)^1

P0 = 24 / 1.165

P0 = 20.60086

P0 = $20.60

Due to an error in computing depreciation expense, Crote Corporation understated accumulated depreciation by $48 million as of December 31, 2021. Crore has a tax rate of 25%. Crores retained earnings as of December 31, 2021, would be: (Round million answer to 2 decimal places.) Multiple Choice

Answers

Answer: Overstated by $12 million.

Explanation:

Since Crote Corporation understated accumulated depreciation by $48 million as of December 31, 2021 and has a tax rate of 25%.

Crores retained earnings as of December 31, 2021, would be overstated in the amount of:

= $48 million × 25%

= $48 million × 0.25

= $12 million

Crores retained earnings as of December 31, 2021, would be overstated by $12 million.

Dell has a standard usage of 1 pound direct materials. Direct materials have a standard price of $26 per pound. In April, Dell produced 4,790 units and paid $142,000 for 5,030 pounds direct materials. Calculate the direct materials quantity variance.

Answers

Answer:

the direct material quantity variance is $6,240 unfavorable

Explanation:

The computation of the direct material quantity variance is shown below:

The direct material quantity variance is

= (Actual quantity - standard quantity) × standard price

= (5,030 pounds - 4,790 pounds) × $26

= $6,240 unfavorable

Hence, the direct material quantity variance is $6,240 unfavorable

The same would be considered and relevant

The Core Company had the following assets and liabilities as of December 31: Assets Cash $58,000 Accounts receivable 25,000 Inventory 20,000 Equipment 50,000 Liabilities Current portion of long-term debt $20,000 Accounts payable 12,000 Long-term debt 25,000 Calculate the current ratio, working capital, and quick ratio. If required, round your answers to one decimal place. Current Ratio fill in the blank 1 Working Capital $fill in the blank 2 Quick Ratio fill in the blank 3

Answers

Answer:

Current Ratio 3.2

Working Capital $71,000

Quick Ratio 2.6

Explanation:

Calculation to determine Current Ratio, Working Capital and Quick Ratio Correct Answer:

Current Ratio= ($58,000 + $25,000 + $20,000) / ($20,000 + $12,000)

Current Ratio= $103,000/32,000

Current Ratio = 3.2

Working Capital= $103,000 - $32,000

Working Capital= $71,000

Quick Ratio=($58,000 + $25,000) / ($20,000 + $12,000)

Quick Ratio=$83,000/$32,000

Quick Ratio= 2.6

Therefore:

Current Ratio 3.2

Working Capital $71,000

Quick Ratio 2.6

ccounts Payable $55,000 Land $90,000 Inventory $10,500 Accounts Receivable $7,500 Equipment $8,000 Deferred Revenue $58,500 Short-term Investments $20,000 Notes Receivable (due in 8 months) $45,500 Interest Payable $2,000 Patents $75,000 What is the amount of intangible assets assuming the accounts above reflect normal activity

Answers

Answer:

The answer is "[tex]\$75,000[/tex]".

Explanation:

The immaterial assets are those assets without physical matter. It would include patents, copyright, goodwill, brand, etc. Instead of tangible assets including such equipment or computer components used to calculate the current value of a business, it improves the overall long-term value of the small company. In that instance, the intangible assets were solely patents. So the response is $75,000.

On January 1, 2016, ABC Corporation purchased Equipment C for $72,000. Equipment C is expected to have a useful life of 8 years, and a salvage value of $2,400. Assume that ABC uses the straight-line method of depreciation for Equipment C. A Prepare the journal entry to record depreciation on the equipment for 2016. (5)

Answers

Answer:

Debit : Depreciation $8,700

Credit : Accumulated Depreciation $8,700

Explanation:

the journal entry to record depreciation on the equipment for 2016.

Sally received 100 shares of stock worth $8,000 as a gift from her father. Her father had purchased the stock for $10,000. When Sally sells the stock, her basis in the shares for determining her gain or loss will be

Answers

Answer:

$8000

Explanation:

Based on the fact that she didn't purchase the stock initially At $10000, but she was gifted it at $8000 her bases upon which she will derive profit or loss from is $8000

Liu, the owner of San Diego Mortgage Solutions, a sole proprietorship, wants to obtain additional business capital to expand operations. The additional business capital is most likely limited to Group of answer choices conducting a private offering. issuing stock. bringing in partners. borrowing funds.

Answers

Answer:

borrowing funds.

Explanation:

Since the owner could not add extra partners as it would be transform into the partnership firm in the case when there is an increase in the number of owners.

In the sole propertiorship, there is only one stockholder and he cant able to issue the stock or the initial public offering

Therefore it would be limited to the borrowing funds

Marina collects and records data in an Excel spreadsheet. She uses the data to produce a line graph.

Marina wants to change the graph so the minimum distance on the y-axis is 0. What should be done to make this change?

A. Adjust the Minimum option to Fixed and change to 0.
B. Adjust the chart style to a 3-D chart so all the data will be displayed.
C. Adjust the selection pane so that the full range of data is selected.
D. Adjust the intervals between tick marks to -10 in the Axis Options box.

Answers

Answer:

A. Adjust the Minimum option to Fixed and change to 0.

Explanation:

Took the course

Find the compound interest on $2,500 at .75% interest compounded daily by the Leader Financial Bank for 20 days.

Answers

Answer:

Interest= $402.96

Explanation:

Giving the following information:

Initial investment (PV)= $2,500

Interest rate (i)= 0.0075

Number of periods (n)= 20 days

To calculate the interest earned after 20 days, we need to use the following formula:

Interest= PV*(1 + i)^n - PV

Interest= 2,500*(1.0075^20) - 2,500

Interest= $402.96

A tight oligopoly refers to:​ a. ​an industry in which the top four firms supply more than 60 percent of the market, have unstable market shares, and do not cooperate with each other. b. ​an industry in which a single firm has over half the market share and no close rival. c. ​an industry in which the top four firms supply more than 60 percent of the market, have stable market shares, and cooperate with each other. d. ​a single firm that controls the entire market and can block entry. e. ​an industry in which a single firm supplies over one-third of the entire market, the market share is stable, and the firm cooperates with other firms in the industry.

Answers

Answer:

c

Explanation:

An Oligopoly is when there are few large firms operating in an industry. While, a monopoly is when there is only one firm operating in an industry.

Oligopolies are characterised by:

price setting firms

product differentiation

profit maximisation

high barriers to entry or exit of firms

downward sloping demand curve

A tight oligopoly is when at most 8 firms hold at least 50% of the market share. there is usually cooperation among the firms

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what is 2 x (18 x 2)? Which equations can be used to determine the area of the irregular figure? i need help on my math homework The distance a freely falling object falls from rest is one-half second is? The start of the Grate Depression can be traced back to which of these factors? Summarize the international causes of global depression (PLEASEEE HELP 30 POINTS ) An experiment to improve eyesight with a new drug involves 100 subjects. 50 subjects are randomly chosen to receive the treatment and the other 50 subjects receive a placebo. There was very little difference between the success rate of the treatment group and the placebo group. The success of the placebo group may be due to Group of answer choices Which polynomial represents (3x2 + x - 4)(2x - 5)?A.6x3 + 13x2 + 3x - 20B.6x3 - 13x2 - 13x + 20C.6x3 + 13x2 + 3x + 20D6x3 - 13x2 - 13x - 20 A 15 foot ladder makes a 52 degree angle with theground. How far will the top of the ladder be above theground? PLEASE HELP ME WITH THIS PLEASE ILL GIVE BRAINLEIST AND I WILL LIKE UR COMMENT AND RATE 5 STARS AND BRAINLEIST< PLEASEEEEEE 10 Reasons why lying can b helpful Choose all the answers that apply.Fluorine (F) has an atomic number of 9 and an atomic weight of 18.99. Fluorine has _____.at least one isotope10 neutrons18 electrons9 protonsan atomic mass of 19 What you know about rolling ' down in the deep?When your brain goes numb, you can call that mental freezeWhen these people talk too much, put that sh ei t in slow motion, yeahI feel like an astronaut in the ocean, aye What you know about rolling' down in the deep?When your brain goes numb, you can call that mental freezeWhen these people talk too much, put that s h e it in slow motion, yeahI feel like an astronaut in the ocean What is the worst thing someone has ever said to you or someone else! Please be honest! Thanks! Draw a number line to represent the inequality.8x I really DONT know whats function What is the ratio of 4 and 120 1. What is the maps purpose? 2. What locations are shown? 3. What do the colours show? 4. What units are used?5. Information and locations connections6. Connections to other topics Data from the CIA FactbookBased on the information in the chart above, which of the following countries most likely has the lowest standard of living?A. BarbadosB. BrazilC. HondurasD. Haiti write any two different between work and power?