After tax investments
Chapter 04 Savings and Payment Services
BQK Co has a real after-tax cost of capital of 9% per year and a nominal after-tax cost of capital of 12% per year. New investments are required by the company to have a before-tax return on capital employed (accounting rate of return) on an average investment basis of 20% per year.
CHAPTER 1
After-tax proceeds from sale of old asset. Proceeds from sale of existing press 1,200,000 Taxes on sale of existing press * 480,000. Total after-tax proceeds from sale (720,000) Initial investment $1,480,000 * Book value $0 (SP – BV) = $1,200,000 $0 $1,200,000 income from sale of existing press
[DOCX File]Chapter 3
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Maximise the tax effectiveness of fund investments thereby delivering the best long term after tax return for members. The Investment objective of the trustees is to aim to achieve real medium to longer-term growth. In recognition of the [____] year investment time frame of members the fund will have a [low/high] proportion of growth assets in ...
Difference Between Pre-Tax Vs. After-Tax Investments
a) Except for tax-exempt investors and tax-deferred accounts, annual tax payments increase investment returns. b) The only way to maintain purchasing power over time is to invest in bonds. c) After adjusting for taxes, long-term bonds consistently outperform stocks.
[DOC File]Investment Strategy Template - SMSF Engine
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Reno's tax rate is 40%, its cost of capital is 12%, and it will use straight-line depreciation for the new machine. a. Compute the annual after-tax cash flows for this project. b. Find the payback period for this project. c. Compute the NPV for this project. SOLUTION: a. Annual cash flows: $46,400 [$56,000 - 40% x ($56,000 - 32,000)] b.
[DOC File]CHAPTER 7: Financial Budgeting
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The above formula gives the pre-tax cost of debt the after tax cost of debt for which interest paid on debentures is an allowable expense for tax purposes will therefore be; Kd (1-T) T being the tax rate. b) Cost of preference shares (kp) The required return to the preference shareholders with perpetual preference share capital will be;
[DOC File]Revision 2 – Investment Appraisal
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The longer the tax is deferred, the less it costs on an after-tax basis. The lower the tax cost, the higher the after-tax return, all else . being . equal. [LO 5] Under what circumstances would you expect the after-tax return from an investment in a capital asset to approach that of tax-exempt assets (assuming equal before-tax rates of return)?
[DOC File]Chapter 9 - SOLUTIONS TO PROBLEMS ASSIGNED
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37. (p. 110) Investments and tax assistance, both tools for financial planning, are also known as A. Checking accounts B. Trusts C. Loans D. Savings accounts E. Financial services Bloom's: Comprehension Difficulty: Medium Learning Objective: 1 Topic: Financial services 38. (p.
[DOC File]BUSINESS FINANCE
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Alternatively, each loan note could be converted after five years into 70 equity shares with a nominal value of $1 each. The equity shares of Luke Co are currently trading at $1·25 per share and this share price is expected to grow by 4% per year. The before-tax cost of debt of Luke Co is 10% and the after-tax cost of debt of Luke Co is 7%.
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