Required1. Prepare a Present Value Comparison using PV formulas(HINT: Do not enter an amount for PMT in the PV formula as there are no cash flowsinvolved with this tax liability; instead, use FV)I really need help with the excel formulas and equations shown in the spaces in the attachments.11 Required:12 1. Prepare a Present Value Comparison using PV formulas1314 (HINT: Do not enter an amount for PMT in the PV formula as there are no cash flows involved with this tax liability; instead, use FV)151617Description18 Time Incurred (hours)19 Hourly Billing Rate20 Taxable Income21 Marginal Tax Rate22 Tax Liability23 Present Value Tax Liability24 After-tax Cash Flow25Before-tax income26 Less: Present Value Tax Liability27 After-tax cash flow2829Present Value ComparisonOption 1:Receive PaymentBefore 12/31Option 2:Receive Payment After12/31120.00$100.00120.00$100.0028%28%

Income includes salary, capital gain, earnings from business or profession and income from other…

Answered: Required 1. Prepare a Present Value…

Business

Accounting

Required 1. Prepare a Present Value Comparison using PV formulas

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter13: Tax Credits And Payment Procedures

Section: Chapter Questions

Problem 3RP

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Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

Question

Required
1. Prepare a Present Value Comparison using PV formulas
(HINT: Do not enter an amount for PMT in the PV formula as there are no cash flows
involved with this tax liability; instead, use FV)
I really need help with the excel formulas and equations shown in the spaces in the attachments.
11 Required:
12 1. Prepare a Present Value Comparison using PV formulas
13
14 (HINT: Do not enter an amount for PMT in the PV formula as there are no cash flows involved with this tax liability; instead, use FV)
15
16
17
Description
18 Time Incurred (hours)
19 Hourly Billing Rate
20 Taxable Income
21 Marginal Tax Rate
22 Tax Liability
23 Present Value Tax Liability
24 After-tax Cash Flow
25
Before-tax income
26 Less: Present Value Tax Liability
27 After-tax cash flow
28
29
Present Value Comparison
Option 1:
Receive Payment
Before 12/31
Option 2:
Receive Payment After
12/31
120.00
$100.00
120.00
$100.00
28%
28%

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