Rich Uncle is getting on in years and no longer can safely navigate the stairs in his beautiful three-story (plus basement) mansion. So, following his doctor’s advice, he pays $250,000 to have a four-story elevator installed.   Immediately prior to installation of the elevator the mansion’s FMV was $7.5M. With the new elevator the mansion’s FMV is $7.75M. Ignoring the %-of-AGI floor, what is the amount of Rich Uncle’s medical expense deduction, if any, on account of the installation? Why is that the correct amount?

Manshukh

1. Richard has just purchased a four-year-old used car, pay $3000 for it. A friend has suggested that he determine in advance how long he should keep the car so as to ensure the greatest overall economy. Richard has decided that, because of style changes, he would not want to keep the car longer than 4 years, and he has estimated the annual expenses and MVs for years 1 through 4 as follows. If Richard's capital is worth 12% per year, at the end of which year should he dispose of the car? Annual expenses MV at end of year Year 1 $950 2,250 Year 2 $1,050 1,800 Year 3 $1,100 1,450 Year 4 $1,550 1,160

Richard Rambo presently owns the Marine Tower office building, which is 20 years old, and is considering renovating it. He purchased the property two years ago for $830,400 and financed it with a 20-year, 75 percent loan at 4.50 percent interest (monthly payments). Of the $830,400, the appraiser indicated that the land was worth $200,000 and the building $630,400. Rambo has been using straight-line depreciation over 39 years (1/39 per year for simplicity). At the present time Marine Tower is producing $53,900 in NOI, and the NOI and property value are expected to increase 2 percent per year. The current market value of the property is $888,000. Rambo estimates that if the Marine Tower office building is renovated at a cost of $200,000, NOI will be about 20 percent higher next year ($64,680 vs. $53,900) due to higher rents and lower expenses. He also expects that with the renovation the NO/ will increase 3 percent per year instead of 2 percent. Furthermore, Rambo believes that after…

Cori's Dog House is considering the installation of a new computerized pressure cooker for hot dogs. The cooker will increase sales by $8,800 per year and will cut annual operating costs by $14,900. The system will cost $51,000 to purchase and install. This system is expected to have a 7-year life and will be depreciated to zero using straight-line depreciation and have no salvage value. The tax rate is 35 percent and the required return is 12.4 percent. What is the NPV of purchasing the pressure cooker?

Looking for answers. I have attached images below. Thanks!

Barbara Thompson is considering the purchase of a piece of business rental property containing stores and offices at a cost of $350,000. Barbara estimates that annual receipts from rentals will be $55,000 and that annual disbursement. other than income taxes will be about $18,000. The property is expected to appreciate at the annual rate of 5%. Barbara expects to retain the property for 20 years once it is acquired. Then it will be depreciated on the basis of the 39-year real-property class (MACRS), assuming that the property would be placed in service on January 1.Barbara's marginal tax rate is 30%, and her MARR is 10%. What would be the minimum annual total of rental receipts that would make the investment break-even'?

Kaleo has made up his mind—he wants a pool in the family’s backyard! He figures his kids and spouse will be thrilled. However, to cover the cost of the pool, they’ll have to pack up and live away from home for a few weeks during the summer to rent their home to vacationers. He crunched the numbers based on the following estimates. 1. Cost of pool/installation   $50,000 2. Life of the pool (no salvage value)   20 years 3. Annual net cash inflows from renting (net of cash expenses for renting and pool maintenance)   $6,500 4. Tax rate   23% 5. Average rate of return    8% Kaleo’s daughter, Sarah, found the above information written on a sheet of paper in his office, along with the following notes. “This is a no-brainer! We’ll recover the cost of this pool in just 7 years, even though we plan to live here until we’re old and gray, or at least as long as the pool hangs on. If we can rent our house out for just 3 weeks each year, it’ll be almost pure profit that we can put toward paying off…

Shanice bought the car for $28,430. The value of the car is predicted to depreciate to $13,590 after 5 years.   1. If Shanice keeps the car for an additional 3 years (8 years total), predict the value of the car at the end of those 3 additional years, assuming the value continues decreasing exponentially at the same rate? $   2. The average maintenance costs on the car are expected to be $350 the year it is purchased and increase by $50 each year after that. Use this to predict the total maintenance costs during the 3 years after the loan is paid off.

Linda just graduated from college. Since she is starting her own business, it’s time to upgrade from her clunker to a reliable vehicle. Linda has the option to purchase a new car for her business at a cost of $31,416 (life of 7 years with no salvage value), estimating that it would help her bring in additional annual net operating cash flows of $7,700 over the life of the car.Determine the simple payback period and the IRR for this investment. Linda expects her business income to be subject to a 30% tax rate. (Round simple payback period to 3 decimal places, e.g. 15.256 and IRR to 2 decimal places, e.g. 15.25%. Round intermediate calculations to 2 decimal places, e.g. 15.25.) Simple payback period   enter a number of years rounded to 3 decimal places years IRR   enter percentages rounded to 2 decimal places %