nces Trent, Incorporated needs an additional worker on a multiyear project. It could hire an employee for a $65,000 annual salary. Alternatively, it could engage an independent contractor for a $72,000 annual fee. Trent's income tax rate is 21 percent. Required: Compute the annual after-tax cost of each option and indicate which minimizes the after-tax cost of obtaining the worker. Note: Round all your intermediate calculations to the nearest whole dollar amount. After-tax cost of employee After-tax cost of independent contractor Option that minimizes after-tax cost

You are an employee of University Consultants, Limited, and have been given the following assignment. You are to present an investment analysis of a small retail income-producing property for sale to a potential investor. The asking price for the property is $1,430,000; rents are estimated at $183,040 during the first year and are expected to grow at 2.5 percent per year thereafter. Vacancies and collection losses are expected to be 10 percent of rents. Operating expenses will be 35 percent of effective gross income. A fully amortizing 70 percent loan can be obtained at 8 percent interest for 30 years (total annual payments will be monthly payments × 12). The property is expected to appreciate in value at 4 percent per year and is expected to be owned for five years and then sold. Required: a. What is the first-year debt coverage ratio? b. What is the terminal capitalization rate? c. What is the investor's expected before-tax internal rate of return on equity invested (BTIRR)? d. What…

You are an employee of University Consultants, Ltd., and have been given the following assignment. You are to present an investment analysis of a new small residential income-producing property for sale to a potential investor. The asking price for the property is $1,250,000; rents are estimated at $200,000 during the first year and are expected to grow at 3percent per year thereafter. Vacancies and collection losses are expected to be 10 percent of rents. Operating expenses will be 35 percent of effective gross income. A 70 percent loan can be obtained at 11 percent interest for 30 years. The property is expected to appreciate in value at 3 percent per year and is expected to be owned for five years and then sold. a. What is the investor’s expected before-tax internal rate of return on equity invested (BTIRR)?b. What is the first-year debt coverage ratio?c. What is the terminal capitalization rate?d. What is the NPV using a 14 percent discount rate? What does this mean?

The NPV is? Round to nearest dollar

Manji

Your storage firm has been offered $96,900 in one year to store some goods for one year. Assume your costs are $95,200, payable immediately, and the cost of capital is 8.1%. Should you take the contract? The NPV will be $ Should you take the contract? The contract (Round to the nearest cent.) be taken (Select from the drop-down menu.)

A mechanical engineer at Anode Metals is considering five equivalent projects, some of which have different life expectations. Salvage value is nil for all alternatives. Assuming that the company’s MARR is 13% per year, determine which should be selected (a) if they are independent, and (b) if they are mutually exclusive. (c) Explain why your selection in part (b) is correct. First Cost, $ Net Annual Income, $/Year Life, Years A −20,000 +5,500 4 B −10,000 +2,000 6 C −15,000 3,800 6 D −60,000 +11,000 12 E −80,000 +9,000 12

GeoWorld Systems uses a subset of the following questions during the interview process for new engineers. For each of the following cases, determine if “the project” or “do nothing” is preferred. The value of MARR in each case is 14%.

Franklin Camps, Incorporated leases the land on which it builds camp sites. Franklin is considering opening a new site on land that requires $2,450 of rental payment per month. The variable cost of providing service is expected to be $6 per camper. The following chart shows the number of campers Franklin expects for the first year of operation of the new site: January February March 150 260 210 February August April 210 Price May 330 June 510 Required Assuming that Franklin wants to earn $7 per camper, determine the price it should charge for a camp site in February and August. Note: Do not round intermediate calculations. July August September October November December Total 660 660 360 390 150 310 4,200

An entrepreneur is offered a service contract that will cost him $700,000 initially. The contract has a 5 years of life and will generate an after tax cash inflow of $180,000 per year. The cost of capital of this project is 12%. What’s the NPV of the project? Should the entrepreneur accept the contract?   Group of answer choices   $51,140; accept $68,418; accept $648,860; reject -$48,524; reject -$51,140; reject