Lin Vu has $100,000 in an investment paying 9 percent taxable interest per annum. Each year Vu incurs $825 of expenses relating to this investment. Compute Vu's annual net cash flow assuming the following: Required: a. Vu's marginal tax rate is 10 percent, and the annual expense is not deductible. b. Vu's marginal tax rate is 35 percent, and the annual expense is deductible. c. Vu's marginal tax rate is 25 percent, and the annual expense is not deductible. d. Vu's marginal tax rate is 40 percent, and only $500 of the annual expense is deductible. Note: For all requirements, round your intermediate calculations to the nearest whole dollar amount. Answer is complete but not entirely correct. Not cash flow b. Net cash flow $ c. Net cash flow $ d. Net cash flow $ Amount

Perkin Corporation has determined that it qualifies for a tax credit in the amount of $120,000. For the current year, it has tax liability before credits of $75,000. It expects at least that amount of tax liability next year.  Required: If the excess credit is not refundable but may be carried forward, calculate the value of the credit. Assume Perkins uses a 4 percent discount rate to calculate present value.  If the excess credit is refundable, what is the value of the credit?

Firm E must choose between two alternative transactions. Transaction 1 requires a $9,150 cash outlay that would be nondeductible in the computation of taxable income. Transaction 2 requires a $14,800 cash outlay that would be a deductible expense. Required: a. Determine the after-tax cost for each transaction. Assume Firm E's marginal tax rate is 25 percent. b. Determine the after-tax cost for each transaction. Assume Firm E's marginal tax rate is 45 percent.

Suppose you are a manager for a certain company. You earn $50,000 per year and are in the 28% federal income tax bracket. Each year you contribute $4,500 tax free to your individual retirement account, IRA. The account earns 6% annual interest. In addition, the amount of tax that you save each year by making these "pre-tax" contributions is invested in a taxable aggressive growth mutual fund averaging 16%.   (c)Although the income from this investment is taxable each year, using Table 12-1, how much will the "tax savings" fund be worth (in $) in 30 years? (Round your answer to the nearest cent.) $

Firm E must choose between two business opportunities. Opportunity 1 will generate an $11,200 deductible loss in year 0, $7,000 taxable income in year 1, and $28,000 taxable income in year 2. Opportunity 2 will generate $8,000 taxable income in year 0 and $7,000 taxable income in years 1 and 2. The income and loss reflect before-tax cash inflow and outflow. Firm E uses a 5 percent discount rate and has a 40 percent marginal tax rate over the three-year period. Use Appendix A and Appendix B. Required: a1. Complete the tables below to calculate NPV. a2. Which opportunity should Firm E choose? b1. Complete the tables below to calculate NPV. Assume Firm E's marginal tax rate over the three-year period is 15 percent. b2. Which opportunity should Firm E choose? c1. Complete the tables below to calculate NPV. Assume Firm E's marginal tax rate is 40 percent in year 0 but only 15 percent in years 1 and 2. c2. Which opportunity should Firm E choose? Complete this question by entering your…

E Co. has incurred $10,000 in costs to issue bonds. The costs are fees paid to a transfer agent, commission on the sale of bonds, and other related fees and expenses. How should these costs be deducted for tax purposes? Question 10 options:     Deduct $10,000 over a two-year period, claiming $5,000 per year.       Deduct $10,000 over a five-year period, claiming $2,000 per year.       Claim $10,000 once all the bonds are sold.       Claim $10,000 as an expense once the bonds mature.     B Co. plans to raise $200,000 for an expansion project through fixed dividend preferred shares at 9%. B's tax rate is 27%. How much corporate income will B require to service the cost of the expansion? Question 7 options:     $0       $18,000       $24,658       $4,860

Suppose you are a manager for a certain company. You earn $50,000 per year and are in the 28% federal income tax bracket. Each year you contribute $5,500 tax free to your individual retirement account, IRA. The account earns 7% annual interest. In addition, the amount of tax that you save each year by making these "pre-tax" contributions is invested in a taxable aggressive growth mutual fund averaging 17%.   (a) How much tax do you save (in $) each year by making the retirement fund contributions?    (b) Using Table 12-1, much will the retirement fund be worth (in $) in 30 years? (Round your answer to the nearest cent.)   (c) Although the income from this investment is taxable each year, using Table 12-1, how much will the "tax savings" fund be worth (in $) in 30 years? (Round your answer to the nearest cent.)

Suppose you are a manager for a certain company. You earn $50,000 per year and are in the 28% federal income tax bracket. Each year you contribute $4,500 tax free to your individual retirement account, IRA. The account earns 6% annual interest. In addition, the amount of tax that you save each year by making these "pre-tax" contributions is invested in a taxable aggressive growth mutual fund averaging 16%. (a)How much tax do you save (in $) each year by making the retirement fund contributions? $  1260 (b)Using Table 12-1, much will the retirement fund be worth (in $) in 30 years? (Round your answer to the nearest cent.) $ ?

Answer each of the following independent questions. Ignore personal income taxes. Required: 1. Suppose you invest $4,000 in an account bearing interest at the rate of 12 percent per year. Complete the table to show how your accumulation grows each year to equal $7,896.00 after six years. 2. You have estimated that your educational expenses over the next three years will be $14,500 per year. Your account bears interest at 9 percent per year. Complete the table given below to show that $36,699.50 is the amount you need to fund your educational expenses. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Suppose you invest $4,000 in an account bearing interest at the rate of 12 percent per year. Complete the table to show how your accumulation grows each year to equal $7,896.00 after six years. (Round your answers to 2 decimal places.) Year Beginning Balance Interest 1 2 3 4 5 6 End Balance

You purchase a REIT for $50. It distributes $3 consisting of $1 in income, $0.50 in long-term capital gains, $0.30 in short-term capital gains, and $1.20 in return of capital. After a year, you sell the stock for $56. If you are in the 30 percent income tax bracket and 15 percent long-term capital gains bracket, what are your taxes owed?