I'm meant to do a capital budgeting analysis on the cost savings of a project and state the NPV and IRR of the project but I don't understand what they're asking as their yearly depriciation tax savings differ from year to year and the 5th year was split into 2 half years.How do you calculate the NPV and IRR of such a project?Thank you so much in advance.
132640
NPV lets you know whether a project is feasible or not at a certain % of interest rate.\n\nSay your funds cost you x%, you can assess whether your project gives you enough returns to meet your financial costs based on the returns (cash inflows) you get at various points of time in the future.\n\nIf your NPV is zero, \n==> Your returns = Your financial costs.\n\nIf your NPV is positive, \n==> Your returns > Your financial costs.\n\nIf your NPV is negative, \n==> Your returns < Your financial costs.\n\nIRR gives you the exact rate of return that you earned based on the returns you get (cash inflows) at various points of time in the future.\n\n\nFor Finding NPV\n================\nCash inflows for all the periods are discounted with the appropriate discounting factors to obtain the discounted cash flows.. whose sum is the total discounted cash inflow..\n\nThis set off against the initial cash outlay would give you the NPV\n\nYou can find the factors from tables or calculate them on your own..\n\nThe logic behind a factor\nSay if the rate is 10% \n\nFirst Year\n------------\nA sum of $100 at the beginning of the first year i.e. zero period would become 110 at the end of the first year\n\nAn amount of 110 at the end is equal to 100 now \nAn amount of 1 at the end is equal to ??\n(1 * 100)/110 i.e. 100/110 = 0.9090\n\nSecond year\n-----------\nA sum of $100 at the beginning of the first year i.e. zero period would become 121 at the end of the second year\n\nAn amount of 121 at the end is equal to 100 now \nAn amount of 1 at the end is equal to ??\n(1 * 100)/121 i.e. 100/121 = 0.8264\n\n\n\nFive and half years\n-----------------\nA sum of $100 at the beginning of the first year i.e. zero period would become 169 at the end of the five and half  years\n\nAn amount of 169 at the end is equal to 100 now \nAn amount of 1 at the end is equal to ??\n(1 * 100)/121 i.e. 100/169 = 0.5917\n\nIf you have factor tables ready hand you can use that for the whole years and calculate the factor for 5 and half years.\n\n\nhttp://www.futureaccountant.com/
49181
Well the PF that is deducted is paid in 2 tranches, check if you got both your tranches also.\n\nYou should ideally get your share + Company share + interest
471212
Month 1. It means it is not taxed on an accumulative base ...usually used as an emergency code while they wait for Inland Revenue to send actual code but not sure in your case. There must be a reason why you are not going onto accumulative and it is probably because you don't have a P45 from last job (?) ... or do you have a second job? If not, then once you get that information, then you will go onto accumulative and get a refund.\n\nOK, so because you have another job, they need to tax you on both incomes. Now because you get a certain amount of allowances each year, usually they work on an accumulative basis so that they can estimate what your total income for the year will be. It's more difficult when you have two incomes, so instead they set a standard rate of tax on the second job, which will always be the same (if the pay in the second job stays the same) and at the end of the year they will add them together, apply the allowances and then most likely send you a refund after 6th April 2007 if one is due (most likely). \n\nHope that helps?
316101
Sir Section 54 of the Income Tax Act 1961 gives the details of saving tax it goes that you have either to purchase bonds as you mentioned but it wont help as those bond would have to be reinvested in same Capital asset rather you can go for another same type of asset of same value you have 3 years from the date of sale or get your money invested in bond and keep renewing each tenure and the last option will be pay a tax and the correctly specifed rate
59114
Your question is worded in a way that indicates that XYZ corp.  will not have any cash flows for the last(7th) year but only a salvage value for year 7.  So I'll perform the problem with cash flows only comming from years 1-6.\n\nTo determine if this investment should be pursued, we must determing the investments Net Present Value.  That is the present value of inflows minus present value of outflows.\nNPV=PV of inflows - PV of outflows\n\n•At the end of year 1, XYZ will receive 240K.  Discount this back 1 year at the cost of capital, 15%, and the present value is $208,695.65.\n•At the end of year 2, XYZ will receive 240K.  Discount this back 2 years at the cost of capital, 15%, and the present value is $181,474.48\n•At the end of year 3, XYZ will receive 240K.  Discount this back 3 years at the cost of capital, 15%, and the present value is $157,803.90\n•At the end of year 4, XYZ will receive 240K.  Discount this back 4 years at the cost of capital, 15%, and the present value is $137,220.78\n•At the end of year 5, XYZ will receive 240K.  Discount this back 5 years at the cost of capital, 15%, and the present value is $119,322.42\n•At the end of year 6, XYZ will receive 240K.  Discount this back 6 years at the cost of capital, 15%, and the present value is $103,758.62\n•At the end of year 7, XYZ will only receive 100K for the salvage.  Discount this back 7 years at the cost of capital, 15%, and the present value is $37,593.70\n\nSum these present values to find the PV of inflows\nSum = $945,869.55\n\nThe present value of outflows is your initial outlay of $850,000.\n\nPV of inflows - PV of outflows = NPV\n  $945,869.55 - $850,000  =  $95,869.55   \n\nThis investment should be undertaken.  Inflows are greater than your outflow.  If NPV was a negative number, the investment would not be profitable and XYZ would not only never recoup their initial investment amount, but it end up costing the amount the NPV was negative.
166263
Even if a project is +NPV, the calculations used generally make a few assumptions.  If a project contains too much risk, a firm not wish to pursue the project because it might cause a bad influence on the cash flows of the firm.\n\nAll of those are basically some form of sensitivity analysis, which is a good way to make sure the project is worth doing.  With a probability distribution, you can figure out the chance that the project will stay +NPV over a variety of conditions.
453256
Only good income tax practetioners can answer your question correctly. No income tax practerioner will answer your question because it involves lot of time to calculate and answer. That too you are asking it for the F.Y 2004-05. Again your financial year end is 30th June.\n\nBest of luck
190267
For the second part, use the formula\nFV = P(1+i)^n,\nwhere P = 2400, i = .055, n = 4 and you are looking for FV\nFV = 2400(1+.055)^4 = 2973.18\n\nFor the first part:\nIs it compounded annually?  If so, then you will owe\n6000(1+.12)^6/12) = 6349.80
496592
Original investment = $6,400\nDecrease % = 8.2\nDecrease = (8.2*6400)/100\n                 = 52480/100\n                 = $524.80\nValue at the end of the year = $6400-524.80\n                                             = $5875.20
51767
After one year the value x will x+x*i=x(1+i) where i the profit and x is the initial value\nAfter 2 year will be x(1+i)^2\nAfter 7 years (2004-1997) will be x(1+i)^7\n\nThe final future value is 1311\nThe initial present value is 309\n(309)(1+i)^7 = 1311\n(1+i)^7 = 1311/309 = 4.2427\n(1+i) = 4.2427^(1/7)\n1+i = 1.22921\ni=0.2292=22.92% annualy\n\nAt 1997- 309*(1+0.229)^0= 309.000000\nAt 1998- 309*(1+0.229)^1= 379.858644\nAt 1999- 309*(1+0.229)^2= 466.9663088\nAt 2000- 309*(1+0.229)^3= 574.0491549\nAt 2001- 309*(1+0.229)^4= 705.6878109\nAt 2002- 309*(1+0.229)^5= 867.5133169\nAt 2003- 309*(1+0.229)^6= 1066.448001\nAt 2004- 309*(1+0.229)^7= 1311.00159
472141
Problem 1: If a piece of real estate purchased for $75,000 in 1998 appreciates at the rate of 6% per year, then its value t years after the purchase will be f(t)=75,000(1.06^t). According to this model, by how much will the value of this piece of property increase between the years of 2005 and 2008? \n\nf=75000*1.06^3=89326.20\nincrease=89326.20-75000=$14,326.20\n\nProblem 2: The amount A in an account after t years of an initial principle P invested at an annual rate r compounded continuously is given by A=Pe^rt where r is expressed as a decimal. What is the amount in the account if $500 is invested for 10 years at the annual rate of 5% compounded continuously?\n\n500*e^.05*10=500*e^.5=$824.36\n\n\n\nProblem 3: Find the number log5(1/5). \n-1
589753
Use the compound interest formula:\n\nA(t) = A (1+r/n)^(nt)  where A(t) is final value, A is starting value, r is interest rate, n is number of times interest is counted in a year, t is number of years. In this case we want to figure r.  Thus,\n1690 = 1255 (1+ r/4)^(2.75)(4)\n1690/1255 = (1+ r/4)^(11)\n1.3466 = (1+ r/4)^(11)\n(1.3466)^(1/11) = (1+ r/4)\n1.0274 = (1+ r/4)\n.0274 = r/4\nr = .1096 or 10.96%
43709
I understand that it is a miscelleneous itemized deduction, subject to the 2% floor.  You really need to see a CPA as this loss may not be recoverable.  There are certain circumstances where other rules may apply.  Annuities are not investments, they are life insurance contracts.  They exist to guarantee you an income for life so that you cannot outlive your investments.
153886
600M/3B=40% return per year\n\n1.8M/3M = 60% return per year.\n\nThough, it really depends what you could do with the remaining 597M.
161981
straight line = 150,000 (200,000 * 1/12 *3 years)\ndouble-declining = 115,740.75 (1/12 * 200% = 16.66%)\n\n200,000*16.66% = 33,333.33\n166,666*16.66% = 27,777.77\n138,888*16.66% = 23,148.15\n\nAccumulated depreciation after 3 years = 84259.25\n200,000-84259.25=115,740.75\n\nAny more homework you need done, ha!
63065
This is a stupid question that doesn't make sense!  What does this mean: "At the end of four years, I will receive $10,000 for 10 years."\n\nWhat the heck do you mean?  I think you are asking questions just to get points.\n\nps- This is a hypothetical answer
319229
Return on assets will be 1.7 * 15% = 25.5%\n\n---\n\nRearranging the forumlas:\n\nNet income = Profit margin (15%) * Sales\n\nTotal assets = Sales/Total Asset Turnover(1.7)\n\nso...\nReturn on assets = Net income / Total assets\n                 = (15% * Sales) / (Sales/1.7)\n                 = 15% * 1.7