Answer:
The NPV of the project is $974.
Explanation:
The net present value is the today's value of a stream of cash flows. The net present value will be the sum of all the expected future cash flows from a project less the initial investment required for the project and it is used to evaluate the investment decisions.
The net present value of an investment project will be:
NPV = CF1 / (1+r) + CF2 / (1+r)^2 + ... + CFn / (1+r)^n - Initial investment
or
If the cash flows are constant or of same amount through out, occur after the same interval of time and are for a defined period of time, they become an annuity and the NPV of such a project can be calculated by,
NPV = (Cash flow per period * Present value of Annuity factor) - Initial cost
The NPV of this project will be = (2000 * 2.4869) - 4000 = 973.8 rounded off to $974
Answer:
$18,000
Explanation:
According to the Internal revenue service, the useful life of the rental property would be 27.50 years.
The computation of the maximum amount of depreciation is shown below:
= (Purchase cost of building - allocated value of land - salvage value) ÷ useful life
= ($600,000 - $104,950 - $0) ÷ 27.50 years
= $495,050 ÷ 27.50 years
= $18,000
Answer:
The capital gains yield on this investment is 2.25%
Explanation:
Sale price = 63.75
Purchase price = 62.35
Capital Gain = 63.75 - 62.35 = 1.40
Capital Gain Yield = $1.40 / $62.35
= 0.0225
= 2.25%
The capital gains yield on this investment is 2.25%
Answer:
The Current price will result in a low supply for the good.
Explanation:
Answer: $0 equipment, $20,000 land, $30,000 inventory, $90,000 partnership interest.
Explanation: The asset basis in the partnership between Xena and Xavier is the same same their basis. In the scenario above, Xena's basis is the same as Xena's partnership basis in asset.
Xena's asset basis include;
Cash = $20,000
Land basis = $40,000
Inventory basis = $30,000
Equipment basis = $0
Therefore Xena's basis in the partnership interest :
$(20,000 + 40,000 + 30,000 + 0) = $90,000
