Answer:
Personal finance skills help you to understand how much you earn, what are your monthly expenses, and help you budget within that income.
Explanation:
Answer:
Sean and Jenny
The deductible net loss for the rental of their home is:
= $18,241.
Explanation:
a) Data and Calculations:
Number of days for rent of $3,000 collected = 40 days
Number of personal use of house = 18 days
Total number of days that the house was in use = 58 days
House Expenses:
Mortgage interest $14,000
Property taxes 3,500
Utilities 1,100
Maintenance 1,300
Depreciation 10,900
Total expenses $30,800
Proportion of house expense:
Rental use = $21,241 (40/58 * $30,800) 69%
Personal use = $9,559 (18/58 * $30,800) 31%
Total expense $30,800
The deductible net loss for the rental of their home is $18,241 ($3,000 - $21,241).
Answer:
The value of the firm or worth of the firm is $147058.82 rounded off to 2 decimal places
Explanation:
We first need to calculate the required rate of return for this firm that will be used as the discount rate in the valuation of the firm using the discounted cash flow methods.
Using the CAPM we can calculate the required rate of return as,
r = rRF + Beta * (rM - rRF)
Where,
- rRF is the risk free rate
- rM is the return on Market
So,
r = 0.04 + 0.4 * (0.11 - 0.04)
r = 0.068 or 6.8%
As the cash flows the firm can generate are expected to remain constant through out and they are generated after equal interval of time, this can be treated as a perpetuity.
The present value of a perpetuity is calculated as follows,
Present Value of perpetuity = Cash Flow / r
Present value of perpetuity = 10000 / 0.068
Present value of perpetuity = $147058.8235
So, the value of the firm or worth of the firm is $147058.82 rounded off to 2 decimal places
Answer:
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