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The full price of the truck is written as $22600 when calculating the total cash payment. The truck price should be $22900, as is shown in the problem statement.

Clerical Error by cory6cory6, 28 Sep 2016 16:06

And it give a bunch of unnecessary information. What is this supposed to be?

Does not answer the question by woodsjamwoodsjam, 06 Jun 2016 16:16

Could you please post the equation(s) you used to get to those answers. Thank you


Equation please by melpremelpre, 05 May 2016 03:21
devrothdevroth 09 Mar 2016 01:22
in discussion Hidden / Per page discussions » Single: What are Sales

why is q $70000? shouldn't it be $700000?

by devrothdevroth, 09 Mar 2016 01:22

The video is on 10 seconds of the camara looking at the ground.

Incomplete video by devrothdevroth, 08 Mar 2016 20:46
loguerjloguerj 02 Mar 2016 04:39
in discussion Hidden / Per page discussions » Midterm 2 Question

No you are taxed on each step you make. A person earning $100,000 is not taxed 28% on the entire amount. Instead, he is taxed 10% on the first $8,375 earned, 15% for the portion $8,351 to $33,950, 25% for $33,951 to $82,250, and 28% for the remainder.

by loguerjloguerj, 02 Mar 2016 04:39

The correct answers were not even marked.

Rolled it back by woodsjamwoodsjam, 07 Feb 2016 17:40

It looks like some of the parameters are off by one, but the general idea is right.

by woodsjamwoodsjam, 29 Jan 2016 15:55

I think I am confused by the third term in this equation. It seems like it would be a constant/equal payment series and calculated using the same mechanics as the first term 10,000(P|A,i=0.02,N=21) except with a correction for the time shift.
When I calculate the third term alone (P|A,i=0.02,9) i am getting 8.16223. Any suggestions for a different approach?

by Jess DueyJess Duey, 28 Jan 2016 15:57

This should help students solve other similar problems, not just this one.

Add in the why part by woodsjamwoodsjam, 06 Dec 2015 18:51

Add in why you order things the way you did. Fill in the blanks so students can use this as a model to solve similar problems, not just this specific one.

You left out the why part by woodsjamwoodsjam, 06 Dec 2015 18:48

Clean it up a bit and I'll give the extra credit. Get rid of the old incorrect parts.

Re: Correct Answer by woodsjamwoodsjam, 01 Dec 2015 15:24

Kill the material on present worth. You don't need it. Also make it much clearer what you are doing to get the internal rates of return and incremental IRRs. Go beyond, put this in your calculator.

Suggestions by woodsjamwoodsjam, 01 Dec 2015 14:35

The above answer is not right and method isn't accurate.

First of all, the price of the car is $16000.

On a five year asset,
Depreciation of the car in year one = $16000*0.32 = $5120

Since the tax rate is 50%,
Total tax on the car = $5120*0.5 = $2560

Net cash flow in year one = Cash inflow - Cash outflow = $5120 - $2560 = $2560

The correct answer to this question is NO

The reasoning behind that is as follows:

You are getting confused on the fact that an increase on Net Income ($5,000) plays a determinant factor on present worth. In one hand, yes it does play a role since in the Income Statement the Net income value is calculated by taking the revenues and subtracting the expenses and depreciation. The value resulting from that algebraic sum is submitted to an income tax percentage, meaning that a percentage of the algebraic sum is taxes.

On the other hand, in the Cash Flow Statement that Net Income value (from the process described above) is added to the depreciation and that sum gives you the Net Cash Flow value that is used on the present worth (PW) formula.

Now, going back to the question above, it states that the Net Income increases in both periods (zero and one) by $5,000; however, this amount is relative. Although the increase is constant, the value is still dependent from the other variables (depreciation, revenues, expenses, etc.) which tells you that regardless of the $5,000 increase in Net Income, there was a decrease of $15,000 in period 0 and an increase of $18,000 in period one of the Net Cash Flow . If you recall from above, is it the Net Cash Flow value the one that is used for PW formulas since that value is absolute for each period.

Doing the calculations:

PW(10%) = -15000(P/F,10%,0) + 18000(P/F,10%.1)
PW(10%) = $-3,636.36

Which means that as soon agree to this project you will be immediately losing $3,636.36 the correct answer is NO

Correct Answer by PedroMunoz88PedroMunoz88, 25 Nov 2015 21:45

You may want to look at this a bit more.

Not even the correct answer by woodsjamwoodsjam, 24 Nov 2015 23:31

This is more of a permanent record of course material.

Checks out on the calculator using TVM solver, N = 24, I% = 3, FV = 100.

Correct by dforsheedforshee, 28 Oct 2015 18:51

I have to run back and rerun a few keys.

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