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What is the payback if an investment’s cost is $45,000 and the after-tax benefit is $2,000 per year?
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- What is the payback if the investment is $22,000 and the after tax benefits are: Years 1 & 2 = $2,500 per year Years 3 & 4 = $3,500 per year Years 5 & 6 =$4,000 per year Years 7 & 8 = $4,500 per year Year 9 = $3,000 Year 10 = $1,500Where did the $30,000 for the annual benefits come from? Also, I though the formula for the payback method was payback method = (cost of implementing solution) / (annual financial benefits – annual costs). Is this what was used here?How should the $70,000 be allocated to each alternative to maximize annual return? What is the annual return?
- . Suppose someone his earned income per year is $7000, and the income guarantee, IG, is $5000. And assume that the tN, the rate at which the transfer is received by him is 50%. Then the disposable income of the recipient in relation to earned income is:Please answer using life-cycle problem. Suppose the interest rate is 5%, the income tax rate 35%, the tax rate on investment income is 20%, and the investment horizon 40 years. (a) What is the final payoff after tax if $100 pre-tax income is invested in a regular savings account? (b) What is the final payoff after tax if $100 pre-tax income is invested in a retirement account? (c) What is the final payoff after tax if $100 pre-tax income is invested in a Roth account?An example of how to calculate net present value is done using the following. Imagine you have been given an investment opportunity wherein if you invest $1,200 today, you will receive $650 dollars at the end of each year for the next 5 years. You could separately choose to invest your money at 10% interest each year. Should you take the investment opportunity? To find the answer, use the NPV formula:
- Assume that the price of real estate is determined by P=PV(all cash flows generated by the real estate). After you have graduated you work for some years and can save some money. You decide to invest in a house which you want to rent out for a rate of 12,000 pound per month. Assume that the rental rate will increase with 1.2% per year (which is 0.1% per month). (For the sake of simplicity, also assume that there are no further costs involved e.g. renovating or repair). a) As the market risk of renting out the house is low, you think that a discount rate of 5.5% (APR with monthly compounding) would be appropriate. What is the price of the house under the assumption that the cash flows from rent will last forever? b) If discount rate is 1% lower than 5.5% what is the price of the house? c) You want to make the valuation of the house more realistic by assuming that the time horizon for the valuation should be 50 years. Again, you assume that the house will generate SEK 12,000 rental…If you put up $1,250 in a one-year investment and get back $1,350. What rate is this investment paying?Help with the last question: your income will be $_____ per year
- An investment promises to pay $6,000 at the end of each year for the next three years and $4,000 at the end of each year for years 4 through 7. Use Table II and Table IV or a financial calculator to answer the questions. Round your answers to the nearest cent. If you require a 11 percent rate of return on an investment of this sort, what is the maximum amount you would pay for this investment?$ Assuming that the payments are received at the beginning of each year, what is the maximum amount you would pay for this investment, given a 11 percent required rate of return?$You are offered an investment with returns of $ 2,213 in year 1, $ 4,670 in year 2, and $ 3,184 in year 3. The investment will cost you $ 6,506 today. If the appropriate Cost of Capital is 7.6 %, what is the Net present Value of the investment?An investment promises to pay $7,000 at the end of each year for the next six years and $3,000 at the end of each year for years 7 through 10. Use Table II and Table IV or a financial calculator to answer the questions. Round your answers to the nearest cent. If you require a 15 percent rate of return on an investment of this sort, what is the maximum amount you would pay for this investment?$ Assuming that the payments are received at the beginning of each year, what is the maximum amount you would pay for this investment, given a 15 percent required rate of return?$