The municipality of Smallville has arranged to borrow $30 million in order to implement several public projects (flood control, school security, etc.). The interest rate will be 3% per year, payable at the end of each year. This $30 million debt will be retired by making payments of $5 million at the end of each year. The Board of Supervisors is concerned that it will take too long to pay off this debt. How many years will it take to retire this $30 million debt and its associated interest payments?

Q: d) Determine the total Annual Worth for the Project e) What is the Present worth of this project

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A: > GIven:> MARR = 5%

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Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.