Suppose that you need to accumulate $10,000 in three years in todays dollars. Wh

Question

Suppose that you need to accumulate $10,000 in three years in todays dollars. What monthly amount in nominal (actual) dollars should your save if your real rate of return is 5% and expected annual inflation rate is 3%? Question 16 options: t $281.9 C $275.1 $258.0 C $246.1 C $268.9 Save Question 17 (1 point) The after tax IRR is Question 17 options: C always greater than the before tax IRR C equal to the before tax IRR plus the inflation rate equal to the before-tax IRR C always smaller that the before tax IRR fs equal to the before tax IRR minus the inflation rate Save Question 18 (1 point) In order to calculate CSF, among other things it is necessary to know Question 18 options the after-tax interest rate, the depreciation rate and the taix C the after-tax interest rate, CCA rate and the tax rate C the before-tax interest rate, tax rate and the depreciation rate the after-tax interest rate, external rate of return and tax rate C the before-tax interest rate, CCA rate and the tax rate Save Question 19 (1 point) Over last 20 years annual inflation in Canada has been 2% on average. It means that annual income of $100,000 in 2013 was equal to in 1995 in terms of real purchasing power Question 19 options ? $80,106.32 C $70,015.94 C $142,824.6 C $64,000.00 156,250.0

Explanation / Answer

Ans 1)

After TAX IRR is always smaller than Before TAX IRR because we divide with (1+Tax rate) to IRR before tax rate adjustment or we deduct tax rate fro before tax IRR

Option D and Option E are correct

Ans 19)

Annual Inflation Rate in Cananda is 2% on average for last 20 years

PW formula for discounting t year cash flow to todays date =CFt/(1+Inflation rate)^t

$100,000 in 2013 would be equal to 100000/(1.02)^18=70015.94 because 2013-1995=18 years

Option B is correct

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.