Answer:
$5,000
Explanation:
Calculation to determine what amount should Martin report as investment income from its ownership of Foster's shares
Using this formula
Amount to be reported as investment income=Net income*Percentage of outstanding shares purchased
Let plug in the formula
Amount to be reported as investment income=$25,000 x 20%
Amount to be reported as investment income= $5,000
Therefore The amount that Martin should report as investment income from its ownership of Foster's shares is $5,000
Answer:
Year Cashflow [email protected]% PV
$ $
0 (14,900) 1 (14,900)
1-12 4,000 5.6603 <u>22,640</u>
NPV <u> 7,740</u>
Explanation:
In this respect, we need to calculate the discount factor of annual cash inflows for 12 years at 14 discount rate. For this purpose, present value annuity interest factor will be used since the cash inflows are constant. Then, we will multiply the annual cashflows by the discount factor so as to obtain the present value of cash inflows. Then, we will deduct the initial outlay from the present value of cash inflows in order to obtain the net present value of the proposal.
It seems fine to me at the part where it says when you work if you are going to abbreviate days then abbreviate them all and that's pretty much all I have to say
Answer:
The aftertax salvage value of the equipment is $302,964
Explanation:
In order to calculate the aftertax salvage value of the equipment, first we would need to calculate the Book value of the equipment after 4 years as follows:
Book value of the equipment after 4 years = Purchase price *(1-depreciation rate each year)
= $2,000,000*(1-0.2-0.32-0.192-0.1152)
=$345,600
Loss on sale = $281,000-345,600
= 64600
Tax benefit on loss = $64,600*34% = $21,964
Therefore, After tax salvage value = selling price + tax benefit
= $281,000 + $21,964
=$302,964
The aftertax salvage value of the equipment is $302,964