What after-tax rate of return

Assignment Help Business Economics

Reference no: EM131810353

One January Gerald Adair bought a small house and lot for $99,700. He estimated that $9700 of this amount represented the land's value. He rented the house for $6500 a year during the 4 years he owned the house. Expenses for property taxes, maintenance, and so forth were $500 per year. For tax purposes the house was depreciated by MACRS depreciation (27.5-year straight-line depreciation with a midmonth convention is used for rental property). At the end of 4 years the property was sold for $105,000. Gerald is married and works as an engineer. He estimates that his incremental state and federal combined tax rate is 24%. What after-tax rate of return did Gerald obtain on his investment?

Reference no: EM131810353

Questions Cloud

Calculate gandolfis roi for the year ended december 31 : Calculate what Gandolfi's ROI would have been for the year ended December 31, 2016 had the company used the double declining balance depreciation .

Determine the after-tax net present worth : Given an income tax rate of 30% and a MARR rate of 5% per year, determine the after-tax net present worth of this investment.

Erecting a small building on a commercial : Mr. Sam K. Jones, a successful businessman, is considering erecting a small building on a commercial lot.

Effective communication practice in organisations : ITECH 5500 – Professional Research and Communication - provide an in-depth analysis of how it applies to you. The topic is "Self-Efficacy"

What after-tax rate of return : What after-tax rate of return did Gerald obtain on his investment?

Calculate what gandolfis roi would have been for the year : Calculate what Gandolfi's ROI would have been for the year ended December 31, 2016, had the company used the double-declining.

Research equipment and has projected the benefits : (a) What is the after-tax rate of return? (b) What is the before-tax rate of return?

Journalize the issuance of the preferred stock : Garb Inc. issues 4,700 shares of $110 par value preferred stock for cash at $135 per share. Journalize the issuance of the preferred stock.

Layout of a new research and experimentation facility : An engineer is working on the layout of a new research and experimentation facility.

User Account

All Pages