Calvin reviewed his canceled checks and receipts this year for charitable contributions, which included an antique painting and
IBM stock. He has owned the IBM stock and the painting since 2005.
Donee Item Cost FMV
Hobbs Medical-
Center IBM stock $5,000 $22,000
State Museum Painting 5,000 3,000
A needy family Food and clothes 400 250
United Way Cash 8,000 8,000
Calculate Calvin's charitable contribution deduction and carryover (if any) under the following circumstances:
(A) Calvin’s AGI is $100,000
(B) Calvin’s AGI is $100,000 but the State Museum told Calvin that it plans to sell the painting
(C) Calvin’s AGI is $50,000.
(D) Calvin’s AGI is $100,000 and Hobbs is a nonoperating private foundation.
(E) Calvin’s AGI is $100,000 but the painting is worth $10,000.
Donee Item Cost FMV
Hobbs Medical-
Center IBM stock $5,000 $22,000
State Museum Painting 5,000 3,000
A needy family Food and clothes 400 250
United Way Cash 8,000 8,000
Calculate Calvin's charitable contribution deduction and carryover (if any) under the following circumstances:
(A) Calvin’s AGI is $100,000
(B) Calvin’s AGI is $100,000 but the State Museum told Calvin that it plans to sell the painting
(C) Calvin’s AGI is $50,000.
(D) Calvin’s AGI is $100,000 and Hobbs is a nonoperating private foundation.
(E) Calvin’s AGI is $100,000 but the painting is worth $10,000.
2 answers:
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Answer:
IRR is greater than required return by 17.38 - 16.8 % = 0.58 %
so project will accept
Explanation:
given data
initial cost = $38,000
cash inflows year 1 = $12,300
cash inflows year 2= $24,200
cash inflows year 3 = $16,100
rate of return = 16.8 %
solution
we consider here IRR is = x so
present value of inflows is equal to present value of outflows .............1
we can say that it as
initial cost = present value
3800 =
solve it we get
x = 17.38%
here IRR is greater than required return by 17.38 - 16.8 % = 0.58 %
so project will accept