Answer:
$0
Explanation:
There is a provision that if the tax received on the money with respect to the valuation of the property is more than the $14,000 the same is to be taxable
Since there is $14,000 worth so no tax collection could be made on the gift amount
If the gift amount exceeds $14,000 the same is to be taxable
So the gift tax in 2016 would be $0
Answer:
D
Explanation:
Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested
IRR can be calculated with a financial calculator
Cash flow in year 0 = $-66,000
Cash flow each year from year 1 to 4 = $20,000
IRR = 8.16%
For the project to be profitable, the IRR has to be greater than the desired rate of return
Since the IRR (8.16%) is lower than the desired rate of return (10%), the project isn't profitable
To find the IRR using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
One risk of lenders is not being repaid. The greater the chance that you wont be paid, the higher interest you will charge as compensation for taking the risk. Loan also involves little risk, you will be wiling to accept lower interest rate. That is the reason why federal government can borrow at lower rates than private parties.
Answer:
Average profit per computer sold
Current:
Average profit per computer sold = Income from sale of Computer / No. of computer sold
Average profit per computer sold = $17,000,000 / 3000 = $5,667
After growth:
Sales = $17,000,000 x 105% = 17,850,000
Number of Computers = 3000 + 600
Average profit per computer sold = Income from sale of Computer / No. of computer sold
Average profit per computer sold = $17,850,000 / 3600 = $4,958
Answer:
a. Premium
b. Discount
c. Discount
Explanation:
a. Valley issued $300,000 of bonds with a stated interest rate of 7 percent. At the time of issue, the market rate of interest for similar investments was 6 percent.
Premium (discount) = Bond's stated interest rate - Market rate of interest for similar investments = 7% - 6% = 1% premium
Therefore, Valley's bond will sell at a premium.
b. Spring issued $220,000 of bonds with a stated interest rate of 5 percent. At the time of issue, the market rate of interest for similar investments was 6 percent.
Premium (discount) = Bond's stated interest rate - Market rate of interest for similar investments = 5% - 6% = -1% discount
Therefore, Spring's bond will sell at a discount.
c. River Inc. issued $150,000 of callable bonds with a stated interest rate of 5 percent. The bonds were callable at 102. At the date of issue, the market rate of interest was 6 percent for similar investments.
Premium (discount) = Bond's stated interest rate - Market rate of interest for similar investments = 5% - 6% = -1% discount
Therefore, River Inc.'s bond will sell at a discount.
