Answer:
d. can be reinvested at higher rates of return.
Explanation:
Option d. can be reinvested at higher rates of return.
The interest rates on the portfolio is the yield that a person receives on his investment. This yield he gets periodically, therefore amount received can be used to generate further yields by reinvesting it into higher interest paying investments.
Answer:
PV of cash outflows = Annuity*(1-1/(1+rate)^number of terms)/rate
= 5000000000*(1-1/(1+9%)^6)/9%
= 22429592951.15
PV of inflows at end of 6 years= Annuity*(1-1/(1+rate)^number of terms)/rate
= 200000000*(1-1/(1+9%)^100)/9%
= 2221820304.00
PV of inflows now = 2221820304/1.09^6 = $1,324,798,853.47
NPV = -22429592951.15+1324798853.47
= -21104794098
We see that the Net Present value added by this method is negative. Hence the project is not beneficial.
Question 1 Completion with Options:
A. used equipment
B. storage warehouse
C. land for future building site
D. new office furniture
E. apartment complex
F. new delivery truck
Answer:
1. The assets purchased in the current year that are eligible to be expensed under Section 179 assuming the cost does NOT exceed the limitations are:
A. used equipment
D. new office furniture
F. new delivery truck
2. $561,000 is the maximum to be expensed with an adjusted basis of 100% for MACRS
Explanation:
There is a maximum deduction of $1,050,000 under section 179. The section affords eligible taxpayers the opportunity to reduce their tax burden in the first year that they purchase eligible properties.
Answer:
It will be a financial disadvantage of Alternative Y over Alternative X
which menas, alternative X is better as their work is lower.
Explanation:
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