The gift to the grandaughter is <span>Partially shielded by the annual gift tax exclusion. In the year of 2016, the federal government created </span><span>the </span>estate<span> and gift </span>tax exemption<span> is $5.45 million per individual.
Which means that the inheritence that given to the granddaughter would be tax free as long as it does not surpass the net value of 5.45 million.</span>
1. All of the following were powers given to the federal government by the National Banking Acts of 1863 and 1864 EXCEPT D. to dismantle privately owned banks
2. When economists measure opportunity cost to help determine the true value of economic decisions, they consider both the D. monetary and human value.
3. Which of the following was NOT an economic institution created in Europe to help foster economic unity among the countries there? D. European Union (EU)
4. Though the challenges of decision making are similar at all levels of the economy, B. the impact decreases as more people are involved.
I think that the impact decreases as more people are involved because these people will be able to analyze many more aspects involving a decision as well as its corresponding consequences. The decision made will be a result of consensus among the people involved for the benefit of the majority if not all.
5. All EXCEPT which of the following options could describe the statement below?
You get something and you give up something else.
B. consumer sovereignty – This is a situation where the desire of the consumer affects the production of their desired goods.
6. Who proposed the first bank of the United States?
B. Alexander Hamilton – He officially proposed the creation of the first bank during the first session of the First Congress.
7. As an economic institution, nonprofit organizations include D. professional organizations. The main purpose of these organizations is to make their profession better or more valuable for the people practicing the profession as well as for the benefit of the general public.
8. In economics, economic institutions serve to A. help establish and keep participation in the economy fluid.
9. Who is credited with first using cost-benefit analysis?
B. Jules Dupuit – A French engineer and economist. He wrote an article in 1848 where the concept of Cost-Benefit analysis was presented.
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Answer:
The answer is: the following three should be used.
- net present value (NPV)
- traditional payback period (PB)
- the modified internal rate of return (MIRR)
Explanation:
First of all, the NPV of the four projects must be positive. Only NPV positive projects should be financed. If the NPV is negative, the project should be tossed away. This is like a golden rule in investment.
Now comes the "if" part. What does the company value more, a short payback period or a higher rate of return.
If the company values more a shorter payback period (usually high tech companies do this due to obsolescence), then they should choose the project with the shortest payback period.
If the company isn't that concerned about payback periods, then it should choose to finance the project with the highest modified rate of return. This means that the most profitable project should be financed.
Answer:
$11.47 million
Explanation:
The present value of an annuity is determined by:
![PV = P*[\frac{1-(1+r)^{-n}}{r}]](https://tex.z-dn.net/?f=PV%20%3D%20P%2A%5B%5Cfrac%7B1-%281%2Br%29%5E%7B-n%7D%7D%7Br%7D%5D)
With annual payments (P) of $1.75 million, for a period (n) of 20 years at a discount rate (r) of 6 percent, the present value is:
<u />![PV = 1.75*[\frac{1-(1+0.06)^{-20}}{0.06}]\\PV=\$11.47\ million](https://tex.z-dn.net/?f=PV%20%3D%201.75%2A%5B%5Cfrac%7B1-%281%2B0.06%29%5E%7B-20%7D%7D%7B0.06%7D%5D%5C%5CPV%3D%5C%2411.47%5C%20million)
<u />
The present value of your winning is $11.47 million
