Answer:
The Correct Answer:
$40,000
Explanation:
IRC Section 1250 requires that excess depreciation (actual depreciation in excess of straight-line depreciation) be recaptured as ordinary income. Since the property has sold for more than the adjusted basis ($300,000 − $40,000 = $260,000 adjusted basis), the initial gains are recaptured based on the original purchase price of $300,000.
<em>This makes the first $40,000 of the profit subject to the unrecaptured Section 1250 gain while the remaining $20,000 is considered regular long-term capital gains.
</em>
A company made a profit of $25,000 over a period of 5 years on an initial investment of $10,000. What is its annualized ROI?
Answer: Out of all the options shown above the one that best represents the annualized ROI is answer choice C) 30%. To solve this you first need to determine the data that will be needed to solve it. In this case the initial investment which is 10,000, the total profit: 25,000, and finally the total number of years: 5. Then we simply use the following formula: Return on Investment = (Gain from Investment - Cost of Investment)/ cost of investment. You then multiply the result by 100% and finally divide by the number of years which in this case is 5.
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Answer:
Vo = <u>C1 </u> + <u>C2 + V2</u>
1 + k (1 + K)2
Vo = <u>$129,600 </u> + <u>$129,600 + $3,200,000</u>
1 + 0.14 (1 + 0.14)2
Vo = $113,684.21 + $2,562,019.08
Vo = $2,675,703.29
The correct answer is C
Explanation:
The current value of the business equals cashflow in year 1 divided by 1 + K plus the aggregate of cashflow and sales value in year 2 divided by 1 + k raised to power 2.
