You are a director of a small firm that intent to invest 1 000 000 in a new mobile app for it's operation and a quarter of of millions rand of the four year of its lunch. What will be the net present value if the firm anticipates inflow of 7 00 000 each for five years. The rate of return is 12%. Do you think this is viable project and why?. Show all calculations

Question 1: Rucas plc is a telecommunications and information technology manufacturing company based in the country of Hambia. The currency of Hambia is the Aira (AR). The company is considering manufacturing the smart phone model H3XG. If the operation were to be set up, the equipment would be purchased for AR3.5 million and the market price at the end of expected 4-year project life will be AR1.25m. The mobile phone will sell for an initial price of AR950 per unit in the first year and this price will increase in line with inflation in Hambia which is expected to continue at the current rate of 6% per annum. It is expected that 3,000 H3XG phones will be sold in the first year, increasing at a rate of 3% each year. The costs of manufacturing H3XG will consist of variable costs which will be 60% of selling price per unit and incremental fixed overheads of AR60,000 per annum. The costs will increase in line with inflation in Hambia. The working capital equal to 10% of expected sales value for the year will be required at the beginning of each year. At the end of the project the working capital will be recovered. Corporation tax in Hambia is 25%, payable one year in arrears. The tax allowable depreciation is at 20% on a reducing balance method. The required rate of return for the project is 15%. YOU ARE REQUIRED TO:

(a) Estimate the net present value of the project, and recommend, on the basis of NPV, whether the project should be undertaken. (maximum word count for the recommendation 50 words).

(b) Explain why NPV is preferable to payback period as a project selection criterion. (maximum word count 100 words).

(c) Discuss any four non-financial objectives that a company should consider when making investment decisions. (maximum word count 100 words). TOTAL 50 MARKS

“My husband is 53, and I am 13 years younger. During our 20-year marriage, I have been in and out of the workforce, raising children, and getting my education. Now, I plan to return to full-time employment. I am essentially just getting my career under way as my husband approaches the completion of his. None of the retirement seminars address the issue that not all husbands and wives are the same age, nor do they retire at the same time.” What unique problems do couples with a wide age gap face as they plan for retirement? What are some solutions to the situation? What should be the investment strategy?

Bob and Donna have been married for 35 years and have filed joint returns since their marriage. The couple has three children: Jack (age 11), Bonnie (age 16), and Margie (age 22). All three children live with Bob and Donna. In addition, none of the children provide more than half of their own support. Margie is a full-time student at a local university and does not have any gross income.

Based on the situation above, answer the following questions:

a. How many personal exemptions can Bob and Donna claim?

b. Assume the original facts, except that Margie is married. She and her husband live with Bob and Donna and they file a joint return. They have a $2,000 tax liability for the year. Can Bob and Donna claim Margie as a dependent on their tax return? Why or why not?

c. Assume the same facts in (b), except that Margie and her husband report no tax liability on their joint return. Also, if the couple had filed separately, Margie would not have had a tax liability on her return, but her husband would have had a $550 tax liability on his separate return. Can Bob and Donna claim Margie as a dependent on their tax return? Why or why not?

d. Assume the original facts except that Margie is married. Margie files a separate tax return. Margie’s husband files a separate tax return and reports a $550 tax liability on the return. Can Bob and Donna claim Margie as a dependent? Why or why not?

Requirements

Clearly identify the requirements being addressed. Explain each of your conclusions and cite appropriate authority to support your position.

Pertaining to 2017 tax laws. Bob and Donna have been married for 35 years and have filed joint returns since their marriage. The couple has three children: Jack (age 11), Bonnie (age 16), and Margie (age 22). All three children live with Bob and Donna. In addition, none of the children provide more than half of their own support. Margie is a full-time student at a local university and does not have any gross income.

Based on the situation above, answer the following questions:

a. How many personal exemptions can Bob and Donna claim?

b. Assume the original facts, except that Margie is married. She and her husband live with Bob and Donna and they file a joint return. They have a $2,000 tax liability for the year. Can Bob and Donna claim Margie as a dependent on their tax return? Why or why not?

c. Assume the same facts in (b), except that Margie and her husband report no tax liability on their joint return. Also, if the couple had filed separately, Margie would not have had a tax liability on her return, but her husband would have had a $550 tax liability on his separate return. Can Bob and Donna claim Margie as a dependent on their tax return? Why or why not?

d. Assume the original facts except that Margie is married. Margie files a separate tax return. Margie’s husband files a separate tax return and reports a $550 tax liability on the return. Can Bob and Donna claim Margie as a dependent? Why or why not?

Please Please Answer According to 2017 Tax Laws. Very important. Thank you

(II) One of the first decisions you have to make as the brand manager for Verona is whether or not to add a new line of coffee makers, the "Super-Verona line. The line would be marketed in addition to the original Verona line. Your brand assistant has provided you with the following facts. Percentage of sales commison is 10%.

a. Retail selling price $100 per unit

b. All margins the same as before

c. Direct factory labor $3 per unit

d. Raw materials $6 per unit

e. Additional factory and admin. overheads $4 per unit

(if unit volume = 50,000)

f. Salesperson's commissions: the same percent as before

g. Incremental sales force travel cost $95,000

h. Advertising for Super Verona $750,000

i. New equipment needed $1,200,000 (to be depreciated over 10 years)

j. Research and development spent $250,000

up to now

k. Research and development to be $625,000 (to be amortized over 5 years)

spent this year to commercialize

the product

Questions

1. What is the contribution per unit of the Super-Verona brand?

2. What is the break-even volume in units and in dollars?

3. What is the sales volume in units necessary for Super Verona to yield in the first year, a 16 percent return on the equipment to be invested in the project?

(III) The $100 selling price for Super Verona seems high to you. You thought you might lower the price to $88 per unit and raise retail margin to 36 percent.

Question

What is the break-even volume in units?