Answer:
The APV of a project will be "$88,958.52".
Explanation:
To calculate the APV (Adjusted Present Value):
NPV of a Equity Financing = ![[-Investment+(\frac{Aftertax \ Returns \ year1}{(1+Rate)})+(\frac{Aftertax \ Return \ year2}{(1+Rate)^2})]](https://tex.z-dn.net/?f=%5B-Investment%2B%28%5Cfrac%7BAftertax%20%5C%20Returns%20%5C%20year1%7D%7B%281%2BRate%29%7D%29%2B%28%5Cfrac%7BAftertax%20%5C%20Return%20%5C%20year2%7D%7B%281%2BRate%29%5E2%7D%29%5D)
On putting the values in the above formula, we get
= ![[-1020000+(\frac{620000}{1+14 \ percent})+(\frac{720000}{1+14 \ percent^2})]](https://tex.z-dn.net/?f=%5B-1020000%2B%28%5Cfrac%7B620000%7D%7B1%2B14%20%5C%20percent%7D%29%2B%28%5Cfrac%7B720000%7D%7B1%2B14%20%5C%20percent%5E2%7D%29%5D)
= ![[-1020000+543859.65+554016.62]](https://tex.z-dn.net/?f=%5B-1020000%2B543859.65%2B554016.62%5D)
= $
Present value:
When $320000 is funded with department to be reimbursed in two installments of I, we provide
⇒ $320000 = 
⇒ 
= $
During first year of a installment,
[320000×0.10] = $32000 is of concern interest as well as the remaining
$152380.95 ($184380.95-$32000) seems to be of principal repayment which leaves $167619.05 ($320000-$152380.95) as a debt for the next year.
Now,
APV = ![[NPV \ of \ Financial+Total \ Tax \ Shield]](https://tex.z-dn.net/?f=%5BNPV%20%5C%20of%20%5C%20Financial%2BTotal%20%5C%20Tax%20%5C%20Shield%5D)
On putting the values in the above formula, we get
⇒ = ![[77878.27+11082.25]](https://tex.z-dn.net/?f=%5B77878.27%2B11082.25%5D)
⇒ = $
Answer:
people are Rational
Explanation:
Suppose the U.S. government encouraged consumers to trade in their old automobiles for more efficient, new models by paying up to $5,000 for the old automobiles. These consumers who did trade in their old automobiles to take advantage of the government offer would be exemplifying the economic idea that they are rational.
Rationality refers to Purposeful Behavior which means that individuals behave/make choices/decisions that will maximize their satisfaction, pleasure or utility.
Being rational in economics means that people will weigh the cost and benefits before deciding in favor of higher benefits. Hence in the scenario people will love to change an old car for a new one and still get $5000.
Explanation:
1. Working "off of books involves working within the underground economy, in which government economic activities are hidden to avoid taxation or laws, or in which products and services are sold illegally.
2. As the government is shielded from activities within the informal economy, they would not be included in GDP figures.
3. If GDP is calculated accurately, the government will find it difficult to set strategies to accomplish macroeconomic objectives. Normally, the government does not receive tax revenue from illegal sales. This could result the government to raise taxes on non-underground company individuals and companies, thus prohibiting their jobs, saving and investment.
Answer:
the expected sale price based on a terminal capitalization rate is $1283152
Explanation:
The NOI (net operating income) is used in the estimation of the profitability in real estate investment.
The first year NOI of a property is $100000 and it is expected to grow by 2% (0.02) per year and to be sold in next ten years (n = 10 years).
r = 100% + 2% = 102% = 1.02
After ten years, the NOI = first year NOI × 
= $100000 × (1.02)¹⁰ = $121899.442
The terminal capitalization rate is 9.5%. Therefore the expected sale price based on a terminal capitalization rate = $121899.442 / 9.5% = $121899.442 / 0.095 = $1283152
the expected sale price based on a terminal capitalization rate is $1283152
