MODULE 9 CAPITAL BUDGETING THEORIES: Basic Concepts Decision Making Process 2. The first step in the decision-making process is to A. determine and evaluate possible courses of action. B. identify the problem and assign responsibility. C. make a decision. D. review results of the decision. Strategic planning 39. Strategic planning is the process of deciding on an organization’ A. minor programs and the approximate resources to be devoted to them B. major programs
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Memo To: John & Jane Smith From: Terrace Long Date: 4/24/15 Re: Summary of various tax issues (1) John Smith ’s Tax Issues: (a) How is the $300‚000 treated for purposes of federal tax income? Applicable Law & Analysis: The issue is to determine how the $300‚000 fee that John received is to be treated for Federal income purposes. Code Sec. 61(a)(1) of the Internal Revenue Code ("IRC") states that the general definition of gross income is "all income from whatever source derived‚ including (but
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Management Fall 2010 PROBLEM SET 1 Investment Policy and Bond Portfolio management Due date: Friday‚ September 17‚ 5:00 pm. No late problem sets will be accepted. 1. Assume that at retirement you have accumulated $825‚000 in a variable annuity contract. The assumed investment return is 5.5% and your life expectancy is 18 years. What is the hypothetical constant benefit payment? PV = -825‚000‚ i = 5.5‚ n = 18‚ PMT = 73‚358.93. 2. You manage a portfolio for Ms. Greenspan‚
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MGMT 640 Section 9056‚ Mid-term Exam Fall 2010 This exam consists of 33 multiple-choice questions. Enter your answers on the Answer tab of the Excel spreadsheet that has been provided. (The worksheet tabs are located at the bottom of your worksheet.) Put your calculations on the Calculations tab as evidence of your work. Your calculations will be used as evidence of your independent work only and will not be used for partial credit for incorrect answers. Change the Excel file name to include
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years. Furthermore‚ they have a strong aversion to risk. Marilyn and David have decided to use their cash savings to purchase an annuity that will provide them with the necessary income to cover their living expenses over their retirement years. They initially consult with Ms. Sheila Young who is an investment advisor at Merrill Lynch about purchasing their desired annuity. Ms. Young is a very experienced advisor and she claims that she could get Marilyn and David a much higher annual income than
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The facts of this case were that the taxpayer (and three others in partnership) entered a complex scheme‚ which involved the partnership‚ and annuity and loan arrangements. The scheme was financed through a series of "round robin" cheques and promised substantial deductions in the first five years of the 15-year plan. A number of documents were exchanged but no cash payments were made. This was calculated to return neutral cash flows with high tax deductions initially and high assessable income‚
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CHAPTER 9 MAKING CAPITAL INVESTMENT DECISIONS Solutions to Questions and Problems 1. The $7 million acquisition cost of the land six years ago is a sunk cost. The $9.8 million current aftertax value of the land is an opportunity cost if the land is used rather than sold off. The $21 million cash outlay and $850‚000 grading expenses are the initial fixed asset investments needed to get the project going. Therefore‚ the proper year zero cash flow to use in evaluating this project is
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1 Basics of Insurance 2 Contents:- * Life insurance * General insurance * Insurance market scenario * Emerging trends in insurance 3 Learning Insurance * What Is Insurance Insurance is concerned with protection of economic value of assets.Tangible assets are human beings‚ house‚ furniture‚ motor cycle etc.Intangible assets are liabilities 4 History of Insurance
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CHAPTER 21 Accounting for Leases ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics Questions Brief Exercises Exercises Problems Concepts for Analysis *1. Rationale for leasing. 1‚ 2‚ 4 1‚ 2 *2. Lessees; classification of leases; accounting by lessees. 3‚ 5‚ 7‚ 8‚ 14 1‚ 2‚ 3‚ 4‚ 5 1‚ 2‚ 3‚ 5‚ 7‚ 8‚ 11‚ 12‚ 13‚ 14 1‚ 2‚ 3‚ 4‚ 6‚ 7‚ 8‚ 9‚ 11‚ 12‚ 14‚ 15‚ 16 1‚ 2‚ 3‚ 4‚ 5‚ 6 *3. Disclosure of leases. 19 2‚ 4‚ 5‚ 7‚ 8 2‚ 3‚ 5 *4. Lessors;
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Loans and Receivables – Long Term PROBLEMS 1. Smart Company has P3‚000‚000 note receivable from sale of plant bearing interest at 12% per annum. The note is dated June 1‚ 2008. The note is payable in 3 annual installments of P1‚000‚000 plus interest on the unpaid balance every June 1. The initial principal and interest payment was made on June 1‚ 2009. The interest income for 2009 is a. P300‚000 c. P210‚000 b. P290‚000 d. P140‚000 rro 1. Trans Company sold a tract of land
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