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.

in discussion Hidden / Per page discussions » accounting: Suppose you purchase a small truck

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

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

~AMP<3

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

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

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.

in discussion Hidden / Per page discussions » TVM: n which of these circumstances would

The correct answers were not even marked.

in discussion Hidden / Per page discussions » Midterm 1 time shifting and present worth

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

in discussion Hidden / Per page discussions » Midterm 1 time shifting and present worth

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?

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

in discussion Hidden / Per page discussions » NewEnvironments: Suppose you have four indivisible investments

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.

in discussion Hidden / Per page discussions » Cashflow: Income vs Cash Flow

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

in discussion Hidden / Per page discussions » IRR: What is the incremental IRR

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.

in discussion Hidden / Per page discussions » Cashflow: Year one car

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

Thus,

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

in discussion Hidden / Per page discussions » Cashflow: Income vs Cash Flow

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**

in discussion Hidden / Per page discussions » Cashflow: Average accounts receivable

Finish off the problem.

in discussion Hidden / Per page discussions » Cashflow: Income vs Cash Flow

You may want to look at this a bit more.

This is more of a permanent record of course material.

in discussion Hidden / Per page discussions » TVM: How much would you have to deposit now

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

I have to run back and rerun a few keys.