Question

35. which variable is not necessary to calculate return on investment?

a. after-tax cash flow

b. equity

c. sales price of property

d. downpayment and leverage

Answer #1

Return on investment is given by = Income from investment / Investment amount

The income from investment, is the after tax cash flow that is obtained from the investment. The investment amount is determined based on the price of the property, how much we pay up front and how much interest we need to pay if a loan is taken.

Thus, the only value we do not need for the calculation of ROI is equity.

Thus, answer - b)

If this answers your question, please be sure to leave a positive rating! If you have any doubts, drop a comment!

Given the following information, please calculate after tax cash
flow for year 1. Assuming a sales price of $1,100,000, please
calculate the after tax cash flow from the sale (don’t forget the
depreciation recapture.) Finally, calculate the after tax IRR for
the investment.
Purchase Price: $900,000
Loan: $750,000, 5%, 25 years (annual payments)
Year 1 NOI: $100,000
Year 2 ATCF: $33,000
Year 3 ATCF: $34,000
Use an 85/15 ratio for depreciation. 39 year, straight line.
35% tax rate on income,...

Given the following project
information, calculate the after-tax operating cash flow (ATOCF)
using the four approaches of calculating operating cash flow.
Project cost = $950,000
Project life = five years
Projected number of units sold per
year = 10,000
Projected price per unit = $200
Projected variable cost per unit =
150
Fixed costs per year = $150,000
Required rate of return = 15%
Marginal tax rate = 35%
Depreciation = Straight-line to zero
over five years (ignore...

What is the discounted cash flow in the final year of an
investment assuming: $7,000 after-tax cash flows from operations,
the machine that is depreciated to $2,000 is sold for $4,000, the
project had initially required $4,000 in additional working
capital, and a 35% marginal tax rate? Assume the investment has a
10-year life and the discount rate is 12 percent.

What is the discounted cash flow in the final year of an
investment assuming: $7,000 after-tax cash flows from operations,
the machine that is depreciated to $2,000 is sold for $4,000, the
project had initially required $4,000 in additional working
capital, and a 35% marginal tax rate? Assume the investment has a
10-year life and the discount rate is 12 percent.

a) What is the Before Tax Cash Flow? b) What is the After Tax
Cash Flow?
Given:
Annual Debt Service $20,876
Vacancy & Collection Loss 5%
Depreciation 11,000
PGI 46,200
Interest 1,700
Operating Expenses 18,400
Marginal Tax Rate 28%
All numbers are annual

Mr. A, who has a 35 percent marginal tax rate, must decide
between two investment opportunities, both of which require a
$50,000 initial cash outlay in year 0. Investment 1 will yield
$8,000 before tax cash flow in years 1, 2, and 3. This cash
represents ordinary taxable income. In year 3, Mr. A can liquidat
the investment and recover his $50,000 cash outlay. He must pay a
non deductible $200 annual fee (in years 1, 2, and 3) to...

a) What is the Before Tax Cash Flow?
b) What is the After Tax Cash Flow?
Given: Annual Debt Service
$20,876
Vacancy & Collection
Loss
6%
Depreciation
10,000
PGI
46,200
Interest
1,701
Operating Expenses
18,400
Marginal Tax Rate
28%
All numbers are annual
If possible, please use a financial calculator and show
me how to solve as I need to learn this concept for this
class.

After-Tax Cash Flows
For each of the following independent situations, compute the net
after-tax cash flow amount by subtracting cash outlays for
operating expenses and income taxes from cash revenue. The cash
outlay for income taxes is determined by applying the income tax
rate to the cash revenue received less the cash and noncash
(depreciation) expenses.
A
B
C
Cash revenue received
$92,000
$452,000
$222,000
Cash operating expenses paid
56,000
317,000
147,000
Depreciation on tax return
14,000
32,000
22,000
Income...

After-Tax Cash Flows
For each of the following independent situations, compute the net
after-tax cash flow amount by subtracting cash outlays for
operating expenses and income taxes from cash revenue. The cash
outlay for income taxes is determined by applying the income tax
rate to the cash revenue received less the cash and noncash
(depreciation) expenses.
A
B
C
Cash revenue received
$92,000
$452,000
$222,000
Cash operating expenses paid
56,000
317,000
147,000
Depreciation on tax return
14,000
32,000
22,000
Income...

After-Tax Cash Flows For each of the following independent
situations, compute the net after-tax cash flow amount by
subtracting cash outlays for operating expenses and income taxes
from cash revenue. The cash outlay for income taxes is determined
by applying the income tax rate to the cash revenue received less
the cash and noncash (depreciation) expenses. A B C Cash revenue
received $97,000 $457,000 $227,000 Cash operating expenses paid
61,000 322,000 152,000 Depreciation on tax return 19,000 37,000
27,000 Income...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 21 minutes ago

asked 27 minutes ago

asked 27 minutes ago

asked 28 minutes ago

asked 33 minutes ago

asked 50 minutes ago

asked 59 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago