Answer:
Option 2 is slightly better.
Explanation:
Giving the following information:
They’ve offered you two different salary arrangements. You can have $85,000 per year for the next two years, or you can have $74,000 per year for the next two years, along with a $20,000 signing bonus today.
To determine which of the options is better, we need to calculate the present value. To do this we will assume an interest rate of 10% per year compounded annually.
PV= FV*(1+i)^n
<u>Option 1:</u>
PV= 85000/1.10 + 85,000/1.10^2= $147,520.66
<u>Option 2</u>:
PV= 20,000 + 74,000/1.10 + 74,000/1.10^2= 148,429.7
Option 2 is slightly better.
Answer:
21.75%
Explanation:
The computation of the expected rate of return is shown below:
According to the Capital Asset Pricing Model (CAPM)
Expected Rate of return = Risk Free Rate of Return + Beta ×(Market Rate of Return - Risk Free Rate of Return)
24.75% = Risk Free Rate of Return + 1.5 × (16.50% - Risk Free Rate of Return)
So,
Risk Free Rate of Return = 0%
Now If the market return this year turns out to be 14.50%
Expected Rate of Return = Risk Free Rate of Return + Beta ×(Market Rate of Return - Risk Free Rate of Return)
= 0% + 1.5 × (14.50% - 0%)
= 21.75%
Answer:
a). $1000 should be included in his gross income.
b) The full amount of $1000 should be included in his gross income as his bonus is due.
c) The full amount of the bonus is to be included.
d) The bonus must be included still.
Explanation:
a). The $1000 amount is due to him already accrued and gross income includes accruals.
b) The bonus is for the year ending 31 december so it should be included.
c) The bonus is an accrual to him for the year.
d) definition of gross income includes all accruals to a taxpayer and this is a bonus for the current year.
Answer:
Japan $760
The United States $1,600
France $6,320
Explanation:
Total personal revenue is the disposable income less personal taxes. Employee earnings minus employee actual taxes in terms of national reports reflect net established income.
The household saving rate is specified as total saving divided by disposable income.
Household saving = Disposable income * Households saving rate
Japan:
$40,000*1.9% = $760
United States
:
$40,000*4% = $1,600
France
:
$40,000*15.8% = $6,320