Gibson Company, a US firm, is considering a joint venture with Brasilia, a Brazilian coffee producer, to process coffee using Gibson's new patented method. Gibson will invest $8 million. The analysis considers 3 scenarios: 1) current tax rates, 2) increased Brazilian corporate tax rate, 3) increased Brazilian withholding tax. Gibson's WACC is 6.48% but the required return is 11.48% due to country risk. The expected NPV is highest under the original assumptions at $19.6 million, followed by the withholding tax scenario at $15.1 million. The increased tax rate scenario has the lowest NPV of $12.6 million.
IRS Releases 2021 Filing Season Tax BracketsTodd Mardis
The president of Capital Preservation Services, LLC, in Mississippi, Todd Mardis oversees daily operations at the tax planning company and maintains relationships with potential and current clients. At his company, Todd Mardis and colleagues provide a range of services, including estate planning, asset protection planning, and advanced tax planning. In October 2020, the Internal Revenue Service (IRS) released updated tax brackets for the 2021 filing season that reflect inflation.
Traditionally, this is the time at which we recommend you take stock of tax and finance for you, your family and your business. A strategic review before the end of the tax year on 5 April 2021 may suggest ways to structure your affairs more efficiently and make the most of your tax position. Some planning points this year reflect the impact of the pandemic.
lease be assured that we are always on hand to advise and keep you up to date with tax and finance measures as they unfold. Throughout this publication, the term spouse includes a registered civil partner. We have used the rates and allowances for 2020/21.
The document provides information on personal and corporate income tax rates in Canada and British Columbia for 2010, including:
- Federal personal income tax rates range from 15% to 29% depending on taxable income levels.
- Provincial/territorial personal income tax rates vary by jurisdiction but generally have two rates, a lower rate for small business income and a higher general rate.
- Corporate income tax rates for Canadian-controlled private corporations are 11-12% at the federal level and vary by province/territory, typically with a lower small business rate and higher general rate.
- British Columbia has a 2.5% lower corporate tax rate and 10.5% higher rate for 2010.
FTB Publication 1100 Taxation of NonResidentstaxhowto
This document from the California Franchise Tax Board provides information about how California taxes nonresidents and individuals who change residency. It outlines California's present tax computation method, which calculates tax liability by multiplying California taxable income by an effective tax rate. The document also discusses how installment sales are taxed depending on whether the individual has always been a nonresident, changes residency to California, or changes residency from California.
The Government will commit $5.5 billion over the next 5 years in tax benefits, grants and training subsidies towards the national effort to raise productivity by upgrading skills and supporting enterprise investments in innovation.
This document summarizes key U.S. tax rates and limits for 2017 including:
- Federal income tax rates for single, married joint, head of household, and married separate filers at various income levels.
- Standard deduction and personal exemption amounts that phase out at certain income levels.
- Contribution and income limits for retirement accounts like 401ks, IRAs, and HSAs.
- Medicare premium amounts and deductibles that vary based on income.
- Social security tax rates and limits on benefits subject to income tax.
Cite Foreign Tax Credit Presentation By Randy Free January 2011randyfree
This document discusses computing direct and indirect foreign tax credits. It provides an overview of key concepts related to foreign tax credits, including source of income rules, credit limitations, the indirect credit, and recent changes to foreign tax credit rules. The document aims to help taxpayers recognize the importance of foreign tax credits and understand general rules around claiming foreign tax credits to minimize double taxation.
The document provides a summary of major taxes for individuals moving or living in South Carolina, including income tax, property tax, sales tax, and other taxes. It outlines tax rates and brackets, deductions, credits, exemptions, and requirements for filing returns. Key points covered are South Carolina's simplified income tax structure following federal law, various deductions for retirement income, capital gains, tuition costs, and more.
IRS Releases 2021 Filing Season Tax BracketsTodd Mardis
The president of Capital Preservation Services, LLC, in Mississippi, Todd Mardis oversees daily operations at the tax planning company and maintains relationships with potential and current clients. At his company, Todd Mardis and colleagues provide a range of services, including estate planning, asset protection planning, and advanced tax planning. In October 2020, the Internal Revenue Service (IRS) released updated tax brackets for the 2021 filing season that reflect inflation.
Traditionally, this is the time at which we recommend you take stock of tax and finance for you, your family and your business. A strategic review before the end of the tax year on 5 April 2021 may suggest ways to structure your affairs more efficiently and make the most of your tax position. Some planning points this year reflect the impact of the pandemic.
lease be assured that we are always on hand to advise and keep you up to date with tax and finance measures as they unfold. Throughout this publication, the term spouse includes a registered civil partner. We have used the rates and allowances for 2020/21.
The document provides information on personal and corporate income tax rates in Canada and British Columbia for 2010, including:
- Federal personal income tax rates range from 15% to 29% depending on taxable income levels.
- Provincial/territorial personal income tax rates vary by jurisdiction but generally have two rates, a lower rate for small business income and a higher general rate.
- Corporate income tax rates for Canadian-controlled private corporations are 11-12% at the federal level and vary by province/territory, typically with a lower small business rate and higher general rate.
- British Columbia has a 2.5% lower corporate tax rate and 10.5% higher rate for 2010.
FTB Publication 1100 Taxation of NonResidentstaxhowto
This document from the California Franchise Tax Board provides information about how California taxes nonresidents and individuals who change residency. It outlines California's present tax computation method, which calculates tax liability by multiplying California taxable income by an effective tax rate. The document also discusses how installment sales are taxed depending on whether the individual has always been a nonresident, changes residency to California, or changes residency from California.
The Government will commit $5.5 billion over the next 5 years in tax benefits, grants and training subsidies towards the national effort to raise productivity by upgrading skills and supporting enterprise investments in innovation.
This document summarizes key U.S. tax rates and limits for 2017 including:
- Federal income tax rates for single, married joint, head of household, and married separate filers at various income levels.
- Standard deduction and personal exemption amounts that phase out at certain income levels.
- Contribution and income limits for retirement accounts like 401ks, IRAs, and HSAs.
- Medicare premium amounts and deductibles that vary based on income.
- Social security tax rates and limits on benefits subject to income tax.
Cite Foreign Tax Credit Presentation By Randy Free January 2011randyfree
This document discusses computing direct and indirect foreign tax credits. It provides an overview of key concepts related to foreign tax credits, including source of income rules, credit limitations, the indirect credit, and recent changes to foreign tax credit rules. The document aims to help taxpayers recognize the importance of foreign tax credits and understand general rules around claiming foreign tax credits to minimize double taxation.
The document provides a summary of major taxes for individuals moving or living in South Carolina, including income tax, property tax, sales tax, and other taxes. It outlines tax rates and brackets, deductions, credits, exemptions, and requirements for filing returns. Key points covered are South Carolina's simplified income tax structure following federal law, various deductions for retirement income, capital gains, tuition costs, and more.
2008 Connecticut CT-1040EZ/Telefile Tax Return and taxman taxman
This document provides instructions for filing estimated income tax payments for the 2009 tax year in Connecticut. Key details include:
- Taxpayers must make estimated payments if their Connecticut income tax minus withholding is $1,000 or more and withholding is less than their required annual payment.
- The required annual payment is 90% of the tax on the 2009 return or 100% of the tax on the 2008 return.
- Estimated payment coupons are due on April 15, June 15, September 15, 2009, and January 15, 2010.
- Taxpayers may owe interest if estimated payments are insufficient by the due dates, even if the total tax is paid by the filing deadline.
- Most teachers retire with 67% of their highest 3-year average salary from the Teacher Retirement System (TRS), which for many is not enough to live on. Contributing to a 403(b) retirement plan can help avoid this income gap upon retirement.
- 403(b) plans allow pre-tax contributions up to $16,500 per year for those under 50 and an additional $5,500 catch-up contribution for those over 50. There are also catch-up provisions for those with 15+ years of service.
- Contributions and earnings grow tax-deferred, and can be withdrawn as retirement income subject to taxes and potential penalties if taken before age 59.5. Minimum distributions are
Traditionally, this is the time at which we recommend you take stock of tax and-finance for you, your family, and your business. A strategic review before the end of the tax year on 5 April 2021 may suggest ways to structure your affairs more efficiently and make the most of your tax position.
Some planning points this year-reflect the impact of the pandemic.
Here is a detailed guide for year-end tax planning.
The document discusses income tax planning strategies for 2012. It notes that income tax rates are scheduled to increase in 2013 when the Bush tax cuts expire. This creates opportunities to harvest capital gains in 2012 by selling appreciated assets and repurchasing similar assets. It also discusses accelerating income into 2012 to take advantage of lower 2012 tax rates and avoiding the new 3.8% Medicare surtax that takes effect in 2013.
In this podcast, Bob Keebler covers Revenue Procedure 2014-18, which provides a simplified method for certain taxpayers to obtain an extension of time to make a portability election. Rev. Proc. 2014-18 provides an automatic extension for certain estates of decedents dying in 2011, 2012 and 2013 to elect portability. The extension applies to estates that would otherwise not have had a filing requirement, and allows the estates to file a return to elect portability until December 31. It includes the estates of same-sex decedents who were not eligible to elect portability until after the Windsor decision. Access more resources in the Planning After ATRA and NIIT Toolkit, including more podcasts, new charts by Bob Keebler as well as webcast recordings and Forefield Advisor alerts/videos, and the complete four-volume set of The CPA’s Guide to Financial & Estate Planning, recently updated for ATRA and NIIT, and much more.
azdor.gov Forms .. ADOR Forms 140ES%20instructionstaxman taxman
This document provides instructions for making estimated income tax payments in Arizona. It explains that estimated payments are required if an individual's Arizona gross income exceeds $75,000 for single filers or $150,000 for joint filers. Payments are due in four equal installments on April 17, June 15, September 15, and January 16 of the following year. However, farmers and fishermen only need to make one payment by January 16. The document also outlines optional voluntary payment methods and includes a table to track estimated payments.
The document compares two LIC plans - the existing Bima Bachat Plan 175 and the new New Bima Bachat Plan 816. Key differences include: the new plan provides survival benefits after 5 years instead of at maturity only, offers higher loan eligibility of 60% surrender value compared to 90% of special surrender value, and the policyholder bears service tax instead of LIC. Other items like backdating, paid-up value, and assignment/nomination remain unchanged between the plans.
How to Prepare Your Startup for Venture Capital Investment - Part 2 Venture...ideatoipo
Getting venture capital funding is the ultimate yet often elusive goal of many Silicon Valley startups. Venture capital funding dramatically improves a startup's chances of having a big IPO or buy out exit. Most startups at their inception have the hope, if not the expectation, that they will eventually receive venture capital funding.
In the current environment, venture capital funding has become more competitive, but it is still available. This presentation is the second of two parts and will cover typical venture capital deal terms and points, negotiating with venture capitalists and what to expect in the current environment.
Corporate, startup and venture capital attorney Roger Royse will discuss:
1) Should you be approaching venture capitalists now
2) How (and when) you should value your startup for venture capitalists
3) What are typical venture capital financing terms
4) What terms you may negotiate and what terms are standard
5) How to protect yourself from dilution, freeze outs and forfeiture of shares
6) How to manage your investors after the close
7) Planning for a venture capital backed exit
8) What to do when things go wrong
9) Troubled company terms, down rounds and recaps
10) How to access and leverage funding sources during a global economic crisis
and more!
This document provides an overview and summary of a presentation on understanding the 3.8% Net Investment Income Tax (NIIT) and its effect on individuals, trusts, estates, and closely held entities. It discusses key aspects of the NIIT such as the definition of net investment income, the threshold amounts, and exceptions. It also summarizes portions of the final regulations related to specific provisions like the treatment of rental real estate activities, qualified retirement plan distributions, and the new safe harbor for real estate professionals.
Pre-tax retirement annuity contributions - the tax benefit that very few bene...Annemie Nieman CFP®
1) The document provides an overview of beneficiary nominations on various financial products like life policies, retirement funds, and living annuities. It explains that valid beneficiary nominations must be made in writing according to each product's contract terms.
2) For retirement funds, trustees must first pay out any dependents as defined in law, and then nominated beneficiaries. For life policies, the nominated beneficiary receives payouts directly, while ceding ownership passes control of the policy.
3) The document also discusses the tax benefits of pre-tax retirement annuity contributions, which can enable savings without additional income. It provides examples showing how pre-tax contributions increase savings and retirement values significantly.
The document provides information on income tax rates in Canada from 2004 to 2009, including:
- Federal tax rates for each year ranging from 15% to 29% applied to thresholds of taxable income
- Charts showing the calculation of federal tax for each tax bracket
- Provincial/territorial tax rates for each jurisdiction, year, and applicable tax brackets
It was published by Dayarayan Management & Consulting and contains tax information from the Canada Revenue Agency to help individuals complete their annual tax returns.
Thanks to Ulster Savings Bank for hosting this event, guest speaker Jonathan Gudema of Planned Giving Advisors and to all of our participants for joining us to learn more about the impact of the new tax law on charitable giving.
Landlords are facing changes to tax legislation that will reduce their rental income. Incorporating rental properties into a limited company allows landlords to avoid capital gains tax, stamp duty land tax, and inheritance tax. It also provides 100% tax relief on mortgage interest and corporation tax of only 17-20% on rental income compared to the individual tax rate of 20-45%. Setting up a specialist trust can further protect the shares of the company from inheritance tax.
This document provides an overview of various tax considerations for private clients, business owners, UK resident non-domiciliaries, and how the company can help. It covers topics like utilizing tax allowances between couples, inheritance tax planning, business and agricultural property relief, pensions, tax efficient investments, and more. The sections describe key aspects of each topic and considerations around qualifying for various reliefs to minimize tax liability.
1. This document provides instructions for making Arizona estimated income tax payments for 2002. It explains who must make estimated payments, how to calculate payment amounts, and payment due dates.
2. Taxpayers who had Arizona gross income over $150,000 ($75,000 for individuals) in 2001 must make estimated payments in 2002 unless their 2002 income will be lower. Payments are due in four equal installments by April 15, June 17, September 16, and January 15 of the following year.
3. Farmers, fishermen, and nonresident aliens have alternative estimated payment schedules with fewer required installments. Voluntary payments can also be made by those not otherwise required to pay estimated taxes.
The document discusses various types of income and their tax treatment according to US tax law. It provides examples to illustrate how to calculate gross income for an individual based on different income categories including wages, bonuses, investment income, partnership losses, and rental income. It also summarizes tax treatment of other items such as alimony, annuities, life insurance payouts, and prizes or awards.
The document discusses Warren Global Corp's Millennium Agency Reform Package proposal for reforming 18 US government agencies over 10 years to reduce costs. Implementing Millennium at FDIC alone could reduce its $39.68 billion budget by $25.99 billion. In total, applying Millennium to 18 agencies could reduce the national debt by $22.81 trillion by 2024, leaving a $4.47 trillion surplus. Millennium requires a one-time $218 million investment and 3 months to install, after which the FDIC budget could be reduced by $193 million per month.
The Impact of the Tax Cuts & Jobs Act on High Tax Bracket Individuals - Show ...gppcpa
Objective: To quantify the effects of the Tax Cuts & Jobs Act for taxpayers in the highest individual tax bracket; to quantify the effects of the increase in the lifetime estate and gift tax exemption for taxpayers at all levels of wealth; and to identify the challenges and opportunities available for taxpayers as a result of these changes.
The document discusses estate planning and transfer taxes. It explains that individuals currently have a $5 million lifetime exemption from estate and gift taxes that can be used during life or at death. It provides an example of how gift taxes work if assets are transferred as a gift during life. It also discusses estate taxes applied to assets transferred at death, as well as the step-up in basis and exceptions for transfers to a spouse.
The document discusses the history and evolution of banking, particularly public banks. It begins with the origins of the word "bank" in Italian and German. It then covers the emergence of banking in medieval Italy and some of the earliest banks. The document defines public sector banks as those that are government-owned and have a social welfare mandate in addition to profit. It provides examples of major public sector banks in India like the State Bank of India and how they have modernized and expanded their services.
Having big data doesn’t automatically lead to better marketing – but the potential is there. Think of big data as your secret ingredient, your raw material, your essential element. It’s not the data itself that’s so important. Rather, it’s the insights derived from big data, the decisions you make and the actions you take that make all the difference.
This document summarizes the debate around how to define and classify hybrid regimes that hold elections but restrict civil liberties. It discusses how scholars initially viewed regimes as either democratic or authoritarian (Section 1). It then explains how Fareed Zakaria coined the term "illiberal democracies" to describe stalled transitions in the 1990s that held elections but abused civil liberties (Section 2). The document analyzes criticisms of this term from scholars like Levitsky, Collier and Way, who argue it diminishes the definition of democracy (Section 3). Lastly, it discusses how understanding hybrid regimes is important for studying modern democratic trends.
2008 Connecticut CT-1040EZ/Telefile Tax Return and taxman taxman
This document provides instructions for filing estimated income tax payments for the 2009 tax year in Connecticut. Key details include:
- Taxpayers must make estimated payments if their Connecticut income tax minus withholding is $1,000 or more and withholding is less than their required annual payment.
- The required annual payment is 90% of the tax on the 2009 return or 100% of the tax on the 2008 return.
- Estimated payment coupons are due on April 15, June 15, September 15, 2009, and January 15, 2010.
- Taxpayers may owe interest if estimated payments are insufficient by the due dates, even if the total tax is paid by the filing deadline.
- Most teachers retire with 67% of their highest 3-year average salary from the Teacher Retirement System (TRS), which for many is not enough to live on. Contributing to a 403(b) retirement plan can help avoid this income gap upon retirement.
- 403(b) plans allow pre-tax contributions up to $16,500 per year for those under 50 and an additional $5,500 catch-up contribution for those over 50. There are also catch-up provisions for those with 15+ years of service.
- Contributions and earnings grow tax-deferred, and can be withdrawn as retirement income subject to taxes and potential penalties if taken before age 59.5. Minimum distributions are
Traditionally, this is the time at which we recommend you take stock of tax and-finance for you, your family, and your business. A strategic review before the end of the tax year on 5 April 2021 may suggest ways to structure your affairs more efficiently and make the most of your tax position.
Some planning points this year-reflect the impact of the pandemic.
Here is a detailed guide for year-end tax planning.
The document discusses income tax planning strategies for 2012. It notes that income tax rates are scheduled to increase in 2013 when the Bush tax cuts expire. This creates opportunities to harvest capital gains in 2012 by selling appreciated assets and repurchasing similar assets. It also discusses accelerating income into 2012 to take advantage of lower 2012 tax rates and avoiding the new 3.8% Medicare surtax that takes effect in 2013.
In this podcast, Bob Keebler covers Revenue Procedure 2014-18, which provides a simplified method for certain taxpayers to obtain an extension of time to make a portability election. Rev. Proc. 2014-18 provides an automatic extension for certain estates of decedents dying in 2011, 2012 and 2013 to elect portability. The extension applies to estates that would otherwise not have had a filing requirement, and allows the estates to file a return to elect portability until December 31. It includes the estates of same-sex decedents who were not eligible to elect portability until after the Windsor decision. Access more resources in the Planning After ATRA and NIIT Toolkit, including more podcasts, new charts by Bob Keebler as well as webcast recordings and Forefield Advisor alerts/videos, and the complete four-volume set of The CPA’s Guide to Financial & Estate Planning, recently updated for ATRA and NIIT, and much more.
azdor.gov Forms .. ADOR Forms 140ES%20instructionstaxman taxman
This document provides instructions for making estimated income tax payments in Arizona. It explains that estimated payments are required if an individual's Arizona gross income exceeds $75,000 for single filers or $150,000 for joint filers. Payments are due in four equal installments on April 17, June 15, September 15, and January 16 of the following year. However, farmers and fishermen only need to make one payment by January 16. The document also outlines optional voluntary payment methods and includes a table to track estimated payments.
The document compares two LIC plans - the existing Bima Bachat Plan 175 and the new New Bima Bachat Plan 816. Key differences include: the new plan provides survival benefits after 5 years instead of at maturity only, offers higher loan eligibility of 60% surrender value compared to 90% of special surrender value, and the policyholder bears service tax instead of LIC. Other items like backdating, paid-up value, and assignment/nomination remain unchanged between the plans.
How to Prepare Your Startup for Venture Capital Investment - Part 2 Venture...ideatoipo
Getting venture capital funding is the ultimate yet often elusive goal of many Silicon Valley startups. Venture capital funding dramatically improves a startup's chances of having a big IPO or buy out exit. Most startups at their inception have the hope, if not the expectation, that they will eventually receive venture capital funding.
In the current environment, venture capital funding has become more competitive, but it is still available. This presentation is the second of two parts and will cover typical venture capital deal terms and points, negotiating with venture capitalists and what to expect in the current environment.
Corporate, startup and venture capital attorney Roger Royse will discuss:
1) Should you be approaching venture capitalists now
2) How (and when) you should value your startup for venture capitalists
3) What are typical venture capital financing terms
4) What terms you may negotiate and what terms are standard
5) How to protect yourself from dilution, freeze outs and forfeiture of shares
6) How to manage your investors after the close
7) Planning for a venture capital backed exit
8) What to do when things go wrong
9) Troubled company terms, down rounds and recaps
10) How to access and leverage funding sources during a global economic crisis
and more!
This document provides an overview and summary of a presentation on understanding the 3.8% Net Investment Income Tax (NIIT) and its effect on individuals, trusts, estates, and closely held entities. It discusses key aspects of the NIIT such as the definition of net investment income, the threshold amounts, and exceptions. It also summarizes portions of the final regulations related to specific provisions like the treatment of rental real estate activities, qualified retirement plan distributions, and the new safe harbor for real estate professionals.
Pre-tax retirement annuity contributions - the tax benefit that very few bene...Annemie Nieman CFP®
1) The document provides an overview of beneficiary nominations on various financial products like life policies, retirement funds, and living annuities. It explains that valid beneficiary nominations must be made in writing according to each product's contract terms.
2) For retirement funds, trustees must first pay out any dependents as defined in law, and then nominated beneficiaries. For life policies, the nominated beneficiary receives payouts directly, while ceding ownership passes control of the policy.
3) The document also discusses the tax benefits of pre-tax retirement annuity contributions, which can enable savings without additional income. It provides examples showing how pre-tax contributions increase savings and retirement values significantly.
The document provides information on income tax rates in Canada from 2004 to 2009, including:
- Federal tax rates for each year ranging from 15% to 29% applied to thresholds of taxable income
- Charts showing the calculation of federal tax for each tax bracket
- Provincial/territorial tax rates for each jurisdiction, year, and applicable tax brackets
It was published by Dayarayan Management & Consulting and contains tax information from the Canada Revenue Agency to help individuals complete their annual tax returns.
Thanks to Ulster Savings Bank for hosting this event, guest speaker Jonathan Gudema of Planned Giving Advisors and to all of our participants for joining us to learn more about the impact of the new tax law on charitable giving.
Landlords are facing changes to tax legislation that will reduce their rental income. Incorporating rental properties into a limited company allows landlords to avoid capital gains tax, stamp duty land tax, and inheritance tax. It also provides 100% tax relief on mortgage interest and corporation tax of only 17-20% on rental income compared to the individual tax rate of 20-45%. Setting up a specialist trust can further protect the shares of the company from inheritance tax.
This document provides an overview of various tax considerations for private clients, business owners, UK resident non-domiciliaries, and how the company can help. It covers topics like utilizing tax allowances between couples, inheritance tax planning, business and agricultural property relief, pensions, tax efficient investments, and more. The sections describe key aspects of each topic and considerations around qualifying for various reliefs to minimize tax liability.
1. This document provides instructions for making Arizona estimated income tax payments for 2002. It explains who must make estimated payments, how to calculate payment amounts, and payment due dates.
2. Taxpayers who had Arizona gross income over $150,000 ($75,000 for individuals) in 2001 must make estimated payments in 2002 unless their 2002 income will be lower. Payments are due in four equal installments by April 15, June 17, September 16, and January 15 of the following year.
3. Farmers, fishermen, and nonresident aliens have alternative estimated payment schedules with fewer required installments. Voluntary payments can also be made by those not otherwise required to pay estimated taxes.
The document discusses various types of income and their tax treatment according to US tax law. It provides examples to illustrate how to calculate gross income for an individual based on different income categories including wages, bonuses, investment income, partnership losses, and rental income. It also summarizes tax treatment of other items such as alimony, annuities, life insurance payouts, and prizes or awards.
The document discusses Warren Global Corp's Millennium Agency Reform Package proposal for reforming 18 US government agencies over 10 years to reduce costs. Implementing Millennium at FDIC alone could reduce its $39.68 billion budget by $25.99 billion. In total, applying Millennium to 18 agencies could reduce the national debt by $22.81 trillion by 2024, leaving a $4.47 trillion surplus. Millennium requires a one-time $218 million investment and 3 months to install, after which the FDIC budget could be reduced by $193 million per month.
The Impact of the Tax Cuts & Jobs Act on High Tax Bracket Individuals - Show ...gppcpa
Objective: To quantify the effects of the Tax Cuts & Jobs Act for taxpayers in the highest individual tax bracket; to quantify the effects of the increase in the lifetime estate and gift tax exemption for taxpayers at all levels of wealth; and to identify the challenges and opportunities available for taxpayers as a result of these changes.
The document discusses estate planning and transfer taxes. It explains that individuals currently have a $5 million lifetime exemption from estate and gift taxes that can be used during life or at death. It provides an example of how gift taxes work if assets are transferred as a gift during life. It also discusses estate taxes applied to assets transferred at death, as well as the step-up in basis and exceptions for transfers to a spouse.
The document discusses the history and evolution of banking, particularly public banks. It begins with the origins of the word "bank" in Italian and German. It then covers the emergence of banking in medieval Italy and some of the earliest banks. The document defines public sector banks as those that are government-owned and have a social welfare mandate in addition to profit. It provides examples of major public sector banks in India like the State Bank of India and how they have modernized and expanded their services.
Having big data doesn’t automatically lead to better marketing – but the potential is there. Think of big data as your secret ingredient, your raw material, your essential element. It’s not the data itself that’s so important. Rather, it’s the insights derived from big data, the decisions you make and the actions you take that make all the difference.
This document summarizes the debate around how to define and classify hybrid regimes that hold elections but restrict civil liberties. It discusses how scholars initially viewed regimes as either democratic or authoritarian (Section 1). It then explains how Fareed Zakaria coined the term "illiberal democracies" to describe stalled transitions in the 1990s that held elections but abused civil liberties (Section 2). The document analyzes criticisms of this term from scholars like Levitsky, Collier and Way, who argue it diminishes the definition of democracy (Section 3). Lastly, it discusses how understanding hybrid regimes is important for studying modern democratic trends.
Insight Out Wales is a 7-week business development program designed for creative people in Wales wanting to start new media businesses. The program provides fast-track training and mentoring from industry experts for early stage companies working in areas like music, gaming, film, and web technologies. Participants will receive £1,000 for completing the course and have their travel and accommodation costs covered if they do not live near Cardiff. Those who finish will also have the chance to pitch for up to £5,000 in startup funding. The application deadline is September 24th and the program runs from October 26th to December 12th.
The document summarizes the history of planning in India. It discusses how the Planning Commission was established in 1950 after India gained independence and how it oversaw 12 Five-Year Plans to promote economic and social development until 2014. It also describes the shift to a new body called NITI Aayog by the new central government to replace the Planning Commission structure. Various early plans for development proposed in the 1930s-40s are also outlined like the Bombay Plan and Gandhian Plan.
The vital importance of this lesson is that it will allow you to acquire a basic level of appreciation and knowledge of the techniques used by the utility company to measure the amount of energy used within the household. After this presentation, you should be able to read your own meter to calculate your energy bill.
SolidCAM to zaawansowany system CAD/CAM pracujący w środowisku SolidWorks oraz Autodesk Inventor przeznaczony do obsługi frezarek 2-5 osiowych, tokarek CNC oraz centrów tokarsko-frezarskich CNC. SolidWorks to system CAD do parametrycznego modelowania 3D, tworzenia złożeń, dokumentacji 2D. SolidWorks pozwala również na projektowanie form i elementów blaszanych oraz posiada moduły do Analiz wytrzymałościowych MES oraz do symulacji wtrysku. Więcej informacji znajdziecie na www.premiumsolutions.pl
Support de formation à un atelier Canopé sur le thème de la veille documentaire et de la curation. Présentation des concepts de veille et de curation, analyse des outils existants et mise en place dans un établissement scolaire.
Marketing 360 stopni personalizowane interakcje w czasie rzeczywistymEwelina Ciach
Dowiedz się jak zautomatyzować marketing w oparciu o analitykę predykcyjną, zdarzenia oraz kontekst interakcji z Klientem nie tylko w kanałach własnych, ale także w Sieci Reklamowej i fizycznych lokalizacjach sklepowych. Poznaj nasze rozwiązanie do szybkiego planowania Customer Experience 360 stopni i zrealizuj z nami spójną interakcję ze swoim Klientem we wszystkich kanałach komunikacji oraz na bieżąco analizuj i optymalizuj swoje kampanie. Przekonaj się jak możesz rozszerzyć profil Klienta o dane ze zdarzeń nie tylko z kanałów własnych, ale także Sieci Reklamowej i fizycznych lokalizacji. Dzięki temu w pełni wykorzystasz potencjał ze scoringów predykcyjnych i zautomatyzujesz swój marketing oraz będziesz mógł planować kolejne działania jeszcze bardziej twórczo!
Jak poprawić scoring BIK, zadbać o wiarygodność i zaoszczędzić na kredycieMichał Szafrański
Dobry scoring w BIK pozwala obniżyć marżę kredytu hipotecznego nawet o 0,5% a to oznacza nawet kilkadziesiąt tysięcy złotych oszczędności na kosztach kredytu. Gra jest warta świeczki!
Ile wniosków kredytowych mogę złożyć, by nie zrujnować swojego scoringu BIK? Co ma największy wpływ na mój scoring? Jak wyczyścić BIK? Jak poprawić scoring? Czy warto go poprawiać? - te pytania zaprzątają głowę roztropnych osób przymierzających się do wzięcia dowolnego kredytu.
Dobra wiadomość: o swój scoring w BIK można zadbać. W ten sposób poprawiamy swoją wiarygodność dla banków, dzięki czemu możemy otrzymywać kredyty na korzystniejszych zasadach.
Z drugiej strony - brak scoringu w BIK lub słaby scoring - potrafią skutecznie uniemożliwić wzięcie kredytu. A to może być bardzo kłopotliwe. Zresztą nie chodzi tylko o kredyty...
Ta prezentacja dostępna jest także w formie 1,5-godzinnego wideo na blogu http://jakoszczedzacpieniadze.pl
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Silicon Valley is recognized globally as the birthplace of some of today’s most popular and iconic technologies. Many of its startups have a particular dynamic to thank for their success: the formation of clusters, or groups of companies and organizations that congregate in a region around a particular field.
Brett Gilbert, an associate professor in Rutgers Business School’s department of management and global business (and @ProfGilbert on Twitter), studies the formation and influence of these clusters. When a prominent university or a powerhouse company draws other, smaller organizations to its region, a tech cluster forms, supporting entrepreneurs as they develop their own breakthroughs. This model has been observed for decades in the United States. Now, emerging markets such as South Africa are seeing nascent cluster formation. And the success of these nations in the global economy may depend, at least in part, on their ability to make clusters work.
Gilbert, who has a Ph.D. in entrepreneurship from Indiana University and served a gubernatorial appointment as an advisory committee member for the Texas Emerging Technology Fund from 2008 to 2010, recently spoke with strategy+business about her research in the U.S. and abroad.
Small-Scale Hydro Power Projects in Ukraine - Roadmap for InvestorsEasyBusiness
This document summarizes information about developing small-scale hydro power (SSH) projects in Ukraine. It finds that Ukraine has potential for SSH development but currently SSH makes up a small portion of electricity generation. It also outlines key regulatory bodies, the green tariff structure, permitting challenges including the lengthy process requiring about 2 years to obtain all necessary documents. Finally, it recommends policy changes like a single window approach to make SSH projects more attractive for investors.
This document summarizes various provisions of the Tax Cuts and Jobs Act (TCJA) including:
1) Individual and corporate tax rates that were reduced under the TCJA.
2) Changes to itemized deductions such as capping state and local tax deductions, mortgage interest deductions, medical expense deductions, and suspending some miscellaneous itemized deductions.
3) Strategies like "bunching" deductions, qualified charitable distributions, and investing in Qualified Opportunity Funds to maximize savings under the new tax law.
The document summarizes Itaú Unibanco's 3rd quarter 2018 earnings results. Recurring net income was R$6.5 billion, up 0.2% from the previous quarter. Recurring ROE was 21.3%, down 30 basis points from the prior quarter. Digital transactions accounted for 74% of credit, 40% of investments, and 18% of payments. Credit quality remained stable with the 90-day default ratio at 2.9% and the cost of credit at 3.4% excluding a specific client reversal. Capital ratios remained strong with Basel III at 14.8% and Tier I at 11.6%. In August 2018, Itaú completed its acquisition of a 49
The President's budget projects that the debt will decline as a percentage of GDP after 2021. It achieves this through tax increases, spending cuts, and economic growth from immigration reform. However, the debt levels may still be too high, and the budget relies on optimistic assumptions and claimed savings that may not occur. It includes some positive steps like responsible reforms and paying for new initiatives, but it could have gone further with entitlement reforms.
The document summarizes the 3rd quarter 2018 earnings results of Itaú Unibanco. Key highlights include:
- Recurring net income of R$6.5 billion in Brazil and R$19.3 billion consolidated.
- ROE of 21.3% in Brazil and 21.7% consolidated.
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This document summarizes projections from the President's FY2015 budget. It shows that the budget projects declining debt levels as a percentage of GDP from 72.1% in 2013 to 69% in 2024. However, the budget relies on optimistic economic and technical assumptions. An independent analysis by CRFB that applies more realistic assumptions still shows declining debt but not as large of a decline, with debt remaining above 70% of GDP through 2024. While the budget includes some responsible reforms, it also leaves major entitlement programs unchanged.
The General Fund deficit in Illinois is projected to almost double from FY2015 to FY2016, increasing from an estimated $6.8 billion to $12.7 billion. This is due to a combination of declining revenues and increasing costs. Revenues are expected to decline by $3.6 billion from FY2015 to FY2016 due to the phase down of temporary income tax increases and the loss of one-time borrowing. Meanwhile, "hard costs" like pensions, debt service, and statutory transfers are projected to rise by $1.9 billion. If spending on core services is held flat, over half of spending in FY2016 would need to be deficit spending.
The document summarizes projections from the Congressional Budget Office (CBO) and the White House Office of Management and Budget (OMB) on revenues, spending, deficits, and debt under current law and the President's budget. It shows that:
- Revenues have averaged 17.4% of GDP over the past 50 years while spending has averaged 20.1%, leading to growing budget deficits and debt levels.
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The document summarizes projections from the Congressional Budget Office (CBO) and the White House Office of Management and Budget (OMB) on revenues, spending, deficits, and debt under current law and the President's budget. It shows that:
- Revenues have averaged 17.4% of GDP over the past 50 years while spending has averaged 20.1%, leading to growing budget deficits and debt levels.
- Under current policies, debt is projected to continue rising to over 80% of GDP by 2025 according to CBO and OMB estimates.
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The document discusses various tax provisions known as "extenders" that expired at the end of 2013 and would cost $85 billion to extend for 2014 and 2015. It notes that making some of the extenders permanent, like bonus depreciation, would significantly increase the cost. The House Ways and Means Committee approved extending some provisions permanently at a 10-year cost of $310 billion, while the Senate Finance Committee approved a two-year extension costing $84 billion. Extending the provisions without paying for them would increase budget deficits and debt levels. The document lists various policy options that could help pay for any extension of the expired tax provisions.
CBO estimates that the federal budget deficit in 2020 will be $1.0 trillion, or 4.6 percent of gross domestic product (GDP). It would increase to 5.4 percent of GDP in 2030 if current law did not change. In CBO’s projections, federal debt held by the public reaches $17.9 trillion at the end of 2020. That amount equals 81 percent of GDP—more than twice its average over the past 50 years. By 2030, debt is projected to reach $31.4 trillion, or 98 percent of GDP, a larger percentage than at any time since just after World War II. It would continue to grow after 2030, reaching 180 percent of GDP by 2050.
Inflation-adjusted GDP is projected to grow by 2.2 percent this year, largely because of continued strength in consumer spending and a rebound in business fixed investment. Output is projected to be higher than the economy’s maximum sustainable output in 2020 to a greater degree than it has been in recent years, leading to higher inflation and interest rates after a period in which both were low, on average. CBO projects that continued strength in the demand for labor will keep the unemployment rate low and drive employment and wages higher. Then over the coming decade, the economy is projected to expand at an average annual rate of 1.7 percent, roughly the same rate as its potential rate of growth.
CBO estimates that the federal budget deficit in 2020 will be $1.0 trillion, or 4.6 percent of gross domestic product (GDP). It would increase to 5.4 percent of GDP in 2030 if current law did not change. In CBO’s projections, federal debt held by the public reaches $17.9 trillion at the end of 2020. That amount equals 81 percent of GDP—more than twice its average over the past 50 years. By 2030, debt is projected to reach $31.4 trillion, or 98 percent of GDP, a larger percentage than at any time since just after World War II. It would continue to grow after 2030, reaching 180 percent of GDP by 2050.
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The CBO January baseline report projects that trillion-dollar deficits will return and the national debt will continue rising rapidly as a percentage of GDP. The president's FY2017 budget aims to stabilize the debt ratio by proposing $3.2 trillion in tax increases and $445 billion in health care savings to pay for $1.25 trillion in new spending initiatives and sequester relief. However, the budget would still leave debt levels at post-WWII record highs without putting debt on a clear downward path or sufficiently addressing entitlement reforms.
US Budget Watch 2024: Fiscal Challenges Facing the Next AdministratinCRFBGraphics
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This document from the Committee for a Responsible Federal Budget (CRFB) analyzes and compares the fiscal impact of tax and spending proposals from Hillary Clinton and Donald Trump. It finds that under current policies, debt is projected to rise to 127% of GDP by 2026. Clinton's proposals could increase debt to between 87-140% of GDP, while Trump's could increase debt to between 90-150% of GDP. To stabilize or reduce debt levels, the candidates' plans would require substantial tax increases, spending cuts, or higher than projected economic growth.
This document provides a summary of Itaú Unibanco Holding S.A.'s earnings for the first quarter of 2018. Key highlights include:
- Recurring net income of R$6.4 billion, up 2.2% from the fourth quarter of 2017 and up 3.9% from the first quarter of 2017.
- Recurring return on equity of 22.2%, up 20 basis points from the fourth quarter.
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Slides from June 30, 2016 Committee for a Responsible Federal Budget webinar on the June 2016 paper "Promises and Price Tags: A Fiscal Guide to the 2016 Election." Watch the video at http://www.crfb.org/events/watch-promises-and-price-tags-fiscal-guide-2016-election.
Presentation by Kathleen Burke and Shannon Mok, analysts in CBO’s Tax Analysis Division, and Joseph Rosenberg, Deputy Director of CBO’s Tax Analysis Division, to the Brazilian Tax and Customs Administration.
2016 Wolfe Research Power & Gas Leaders ConferenceAES_BigSky
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The Argentine financial system remains healthy despite a 31% depreciation of the peso. Bank deposits have experienced usual seasonal fluctuations. The banking system is extremely liquid with a low currency mismatch of 7.4% in regulatory capital, the lowest level in 10 years.
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AZN employs all seven strategic staircases to growth and the three horizons of the real options model to sustain short, mid, and long-term value creation. It maximizes profits from existing drugs, acquires other firms, expands geographically, and specializes therapeutically to grow. AZN discovers, develops, manufactures, and markets drugs in-house while distributing through wholesalers. With a diverse pipeline and market power, AZN innovates through resources like intellectual capital, relationships, and financial capacity to leverage high returns exceeding competitors.
1. Amazon has pursued a strategy of low prices through discounted pricing and low shipping costs to gain market share in online retail. This strategy has increased revenues and brand value.
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3. Amazon's near-break even pricing strategy relies on revenue from other business lines like Prime membership and web services to be profitable, while keeping prices low to drive sales volume. This strategy has helped Amazon become the dominant leader in e-commerce.
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1) The document analyzes and compares the short-term liquidity, profitability, return on investment, long-term solvency, and market ratios of Microsoft (MSFT) and Oracle (ORCL) between 2013-2014.
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2. Year 0 N1 N2 N3 N4 N5 Initial Outflow
Total Profits in BRL 0 40,000,000$ 60,000,000$ 70,000,000$ 90,000,000$ 120,000,000$ 8,000,000$
Profits Allocated to
Gibson (40%) 0 16,000,000$ 24,000,000$ 28,000,000$ 36,000,000$ 48,000,000$
Income Taxes by Brazilian
Gov (10%) 0 1,600,000$ 2,400,000$ 2,800,000$ 3,600,000$ 4,800,000$ ##########
Profits After Brazilian
Gov Taxes 0 14,400,000$ 21,600,000$ 25,200,000$ 32,400,000$ 43,200,000$ 48,234,200.00000$
Gibson's Profits (BRL-$
Conversion @
1BRL=0.31414USD) 0 4,523,616$ 6,785,424$ 7,916,328$ 10,178,136$ 13,570,848$ BRL
Less: US Expatriated
Taxes Paid (7%) 0 316,653$ 474,980$ 554,143$ 712,470$ 949,959$
CFs From JV 0 4,206,963$ 6,310,444$ 7,362,185$ 9,465,666$ 12,620,889$
PV CFs (8,000,000)$ 3,773,738$ 5,077,688$ 5,313,930$ 6,128,629$ 7,330,020$
Total PV of CFs ########## Safety Margin 42.38% IRR 53.86%
NPV ##########
Year 0 N1 N2 N3 N4 N5 Initial Outflow
Total Profits in BRL 0 40,000,000$ 60,000,000$ 70,000,000$ 90,000,000$ 120,000,000$ 8,000,000$
Profits Allocated to
Gibson (40%) 0 16,000,000$ 24,000,000$ 28,000,000$ 36,000,000$ 48,000,000$
Income Taxes by Brazilian
Gov (30%) 0 4,800,000$ 7,200,000$ 8,400,000$ 10,800,000$ 14,400,000$ ########## 144702000.00
Profits After Brazilian
Gov Taxes 0 11,200,000$ 16,800,000$ 19,600,000$ 25,200,000$ 33,600,000$ BRL
Gibson's Profits (BRL-$
Conversion @
1BRL=0.31414USD) 0 3,518,368$ 5,277,552$ 6,157,144$ 7,916,328$ 10,555,104$
Less: US Expatriated
Taxes Paid (0%)*** 0 -$ -$ -$ -$ -$
CFs From JV 0 3,518,368$ 5,277,552$ 6,157,144$ 7,916,328$ 10,555,104$
PV CFs (8,000,000)$ 3,156,053$ 4,246,573$ 4,444,147$ 5,125,496$ 6,130,243$
Total PV of CFs ########## Safety Margin 31.89% IRR 43.37%
NPV ##########
Year 0 N1 N2 N3 N4 N5 Initial Outflow
Total Profits in BRL 0 40,000,000$ 60,000,000$ 70,000,000$ 90,000,000$ 120,000,000$ 8,000,000$
Profits Allocated to
Gibson (40%) 0 16,000,000$ 24,000,000$ 28,000,000$ 36,000,000$ 48,000,000$
Income Taxes by Brazilian
Gov (10%) 0 1,600,000$ 2,400,000$ 2,800,000$ 3,600,000$ 4,800,000$ ##########
Profits After Brazilian
Gov Taxes 0 14,400,000$ 21,600,000$ 25,200,000$ 32,400,000$ 43,200,000$
Brazil Witholding Tax
(10%) 1,440,000$ 2,160,000$ 2,520,000$ 3,240,000$ 4,320,000$ ##########
Profits After Brazilian
Withholding Taxes 12,960,000$ 19,440,000$ 22,680,000$ 29,160,000$ 38,880,000$ 28,880,000$
This net increase in corporate income taxes in Brazil resulted in an "initial" tax credit of 20% (30%Brazil vs 10%US) considering US taxes are
still 10%. Consequently, the increase in these tax outflows required by Brazil created a tax credit which eliminated the US Withholdings tax of
7%. However, this scenario resulted in a lower NPV as the tax outflows - due to increased Brazilian Gov income taxes - became greater than the
tax benefit received by the US when 0% taxes were distributed to the US via withholding taxes. This resulted in a larger tax outflow, and
consequently, lower profitability comparative to scenario 1. Undertaking this project would carry a greater opportunity cost and investment risk
considering the expected reward is lower than before, at the same project hurdle rate. In other words, the risk reward relationship is lower, or not
optimized, at the same risk requirement - lowering our Alpha = return per unit of risk. Undertaking this project would significantly reduce our
forecasted CFs, ROIC, IRR, and NPV. For example, the NPV was significantly reduced from $19,634,005 to 15,102,513. However, the NPV is
still significantly high and would produce advantageous synergies in the future regarding profitability and DCFs. Since the IRR of outcome 2
(43.37%) is still high and is > 11.48 (Hurdle Rate), and significantly larger, we have a high margin of safety (31.89%) before our actual return
using DCFs that would adversely produce a NPV of 0 or break-even - indicating we have flexibility before the returns deviate into negative
territory. The likelihood/probability of a positive return on invested capital, adjusted for various risk factors, is high.
With a RR of 11.48%; a JV project lifetime of 5 years; and PVCFs of $27,634,005 - our NPV is $19,624,005 after adjusting the WACC of 6.48%
to include an added risk premium of 5%. Consequently, our discount rate or project hurdle rate to discount CFs to their present worth today, is
11.48%. This RR accounts for country, geopolitical, increased taxes, and generated capital to finance this project. After accounting for Brazilian
and US tax implications and outflows, currency conversion assumptions, and additional risks just mentioned to discount the PV of all expected
CFs; the NPV is $19,624,005. Since the IRR of outcome 1 (53.86%) is the highest of the project scenarios and is > 11.48 (Hurdle Rate), and
significantly larger, we have a high margin of safety (42.38%) before our actual return using DCFs that would adversely produce a NPV of 0 or
break-even - indicating we have flexibility before the returns deviate into negative territory. The likelihood/probability of a positive return on
invested capital, adjusted for various risk factors, is high.
Scenario 1: Origional Assumptions
Scenario 2: Increased Brazilian Fed Income Tax
Scenario 3: Increased Brazilian Withholding Tax
3. Gibson's Profits (BRL-$
Conversion @
1BRL=0.31414USD) 0 4,071,254$ 6,106,882$ 7,124,695$ 9,160,322$ 12,213,763$
Less: US Expatriated
Taxes Paid (7%) 0 284,988$ 427,482$ 498,729$ 641,223$ 854,963$ BRL
CFs From JV 0 3,786,267$ 5,679,400$ 6,625,967$ 8,519,100$ 11,358,800$
PV CFs (8,000,000)$ 3,396,364$ 4,569,919$ 4,782,537$ 5,515,766$ 6,597,018$
Total PV of CFs ########## Safety Margin 36.05% IRR 47.53%
NPV ##########
eNPV Analysis A B eNPV
Original ########## 60% 11,774,403.03$
Increased Income Tax ########## 20% 3,020,502.64$
Increased Withholding Tax ########## 20% 3,372,320.91$
Totals 100% 18,167,226.57$
3. Would you recommend that Gibson participate in the joint venture? Explain.
eNPV Analysis A B eNPV
Original ########## 60% 11,774,403.03$
Increased Income Tax ########## 20% 3,020,502.64$
Increased Withholding Tax ########## 20% 3,372,320.91$
Totals 100% 18,167,226.57$
4. What do you think would be the key underlying factor that would have the most influence on the profits earned in Brazil as a result of the joint venture?
5. Under what circumstances might Gibson shift to more equity financing when considering joint ventures like this? What is the minimum required return that
would still make this investment worthwhile?
This net increase in Brazilian Withholding taxes resulted in a lower NPV as the tax outflows - due to increased Brazilian Withholding taxes -
were greater than the outflows required by the initial assumptions (Option 1), but these outflows were still lower than the cash outflows required
by Option 2 when Brazil's Federal Income Taxes were substantially higher. Undertaking this project would carry a greater opportunity cost and
investment risk comparative to Scenario 1 considering the expected reward is lower than before, at the same project hurdle rate. In other words,
the risk reward relationship is lower, or not optimized, at the same risk requirement - lowering our Alpha = return per unit of risk. Undertaking
this project would Moderately reduce our forecasted CFs, ROIC, IRR, and NPV. The NPV is still significantly high and would produce
advantageous synergies in the future regarding profitability and DCFs. Since the IRR of outcome 3 (47.53%) is still high and is > 11.48 (Hurdle
Rate), and significantly larger, we have a high margin of safety (36.05%) before our actual return using DCFs that would adversely produce a
NPV of 0 or break-even - indicating we have flexibility before the returns deviate into negative territory. The likelihood/probability of a positive
return on invested capital, adjusted for various risk factors, is high. This scenario would produce greater DCFs and NPV if this option
materialized instead of option 2 where income taxes were increased.
Yes. Under either scenario, the NPV is highly positive and, when combined, The NPV is still high and close the best scenario available - Scenario
1. Either outcome will help generate a risk-adjusted return provided to shareholders via wealth maximization thru value-added expansion
opportunities, create prosperous financial economic benefits for the firm's future, its operating capacity, and help spread fixed costs. Simply, the
project is profitable and beneficial regardless of which mutually exclusive scenario plays out. Scenario 1, however, will maximize shareholder
wealth creation and optimize alpha and firm profitability.
Additionally, FCF would increase if the firm decided to retain a portion of its ROIC a few years after expansion as long as its future operating
cash flows increased and its future CapEX decreased proportionately. This would fuel money to develop new and/or existing products, improve
the quantity and scope of value-added investments, enable the firm to maintain its payout ratio while still increasing dividends, and increase stock
buybacks to improve EPS and share price appreciation.
The IRR of all outcomes are significantly larger than our hurdle rate, and we have a high margin of safety before our actual return using DCFs
that would adversely produce a NPV of 0 or break-even - indicating we have flexibility before the returns deviate into negative territory. The
likelihood/probability of a positive return on invested capital, adjusted for various risk factors, is high regardless of which option plays out.
First off, the tax implications are a key factor that will have an impact on profits earned in Brazil. The implications and milestones of this project
must be prudently analyzed considering this project has a definite lifetime and benefits will stop in the future after the terminal value. An
additional key variable to consider is the future economic conditions such as GDP per capita, export costs and tariffs; GDP; and existing market
share and potential for our firm to capture a portion of it. Coffee is heavily demanded from local Brazilian “coffee farmers” where cut-rate prices
are offered to big business such as Starbucks in the US. Will foreign demand really be high? Brazil is an emerging market which implies added
risk is necessary considering political and economic forces are more volatile than here in the US. Consequently, profit estimates are extremely
volatile. The tax implications, followed by adjustments made to the WACC for an additional risk premium of 5% to compensate the firm for
addition risk associated with this international joint venture - such as country, geopolitical, currency risks, and generated capital to finance this
project; and the fact that future tax implications are not known - volatile. Additionally, a JV has a set duration and is a limited time partnership.
This implies future benefits are capped and must return a ROI in a definitely defined time period.
Gibson might consider additional equity financing as their capital structure is burdened with debt of 70%. This implies the firm is highly levered.
If Gibson believes these CFs are highly volatile, the firm should use equity to deleverage this investment so it can ensure sufficient cash is
available to repay debt and interest expenses as they mature. If additional equity were used, this would increase the WACC and RR as equity is
always more expensive to finance than debt; and decrease the eNPVs, profitability, and expected returns associated with each mutually exclusive
option.
4. 6. When Gibson was assessing this proposed joint venture, some of the managers in the company recommended that it borrow the Brazilian currency rather
than using US dollars to obtain some of the necessary capital for the initial investment. They suggested that such a strategy could reduce Gibson’s exchange
rate risk. Do you agree? Explain.
PPP
IRP
7. Discuss the benefits of the joint venture from the perspective of Brasilia. What is the maximum amount of money Brasilia should invest?
For the Government, great benefits - considering implications of increased tax revenue (especially under scenario 2 or 3), but no benefits
regarding worker implications of increased competition (rivalry) and local business market share dilution - this could impact the prospects of local
emerging market synergies.
For the firm to invest more in its Brasilia plant, it would be most advantageous to invest (accordingly) if option 1, 3, or 2 occurred respectively.
If the Brasilia division were to invest more than 60% of aggregate profits and remit less than 40%, the RR would increase as additional risk would
need to be accounted for. I believe this combination (60 vs 40) is exceptional considering the majority of these earnings are being reinvested into
the core operations at the Brasilia plant, while the remitted earnings are benefiting the US firm to expand with more capital towards more and
diversely beneficial investments. This combination seems to benefit both plants involved. If an increase was desired I would place a 70%
reinvested cap as any greater would leave the firm unruly exposed and leveraged beyond their means.
Such an increase in the currently retained earnings (60%) at the Brasilia plant would increase the firms degree of finanvial leverage as the
majority of financing seems to be levered via debt. As long as the interest expense tax deductions produce synergies - and the capital
structure permits greater debt financing without being over-levered - an increase in financial leverage will produce greater shareholder
weath maximization (greater increases in EPS and EBIT correlation) as long as the DOL is low and ROIC > Kd.
If Brasilia's government were to invest, per say, they should invest accordingly to their net advantage in increased tax revenue provided each
scenario. Scenario 2 is best for Brasilia, followed by scenario 3 and 1. Scenario 2 = $45,600,000 or BRL 144,702,000 in aggregate tax revenue;
Scenario 3 = $28,880,000 or BRL 91,644,900; and Secnario 1 will generate $15,200,000 or BRL 48,234,200.
The minimum required return that will make this investment worthwhile is our adjusted WACC or project hurdle rate of 11.48%. Any return at or
below will produce a neutral or negative ROIC respectively. Thus, as long as the return is slightly greater than the RR, the investment is
worthwhile as it will produce profitable DCFs.
Purchasing Power Parity (PPP) suggests that a home currency will depreciate if the current home inflation rate exceeds the current foreign inflation rate. In other
words, PPP indicates that relatively high inflation will cause imports to increase, exports to decrease, and the local currency should depreciate by the inflation
differential between the two countries; or vice versa. This will help restore the currencies towards equilibrium, overtime, where the same basket of goods costs
the same in both currencies. For example, assume that the inflation rate in The US is 3%, while the inflation rate in Brasilia is 8%. According to PPP, the USD
should appreciate by 4.85% ((1+0.08)/(1+0.03)-1) as demand for the BRL, comparative to the USD, will decrease – pushing the two currencies towards parity.
I agree. The Predetermined fixed exchange rate will produce a loss or a gain if BRL is converted to USD. If US inflation > BR inflation; there will be an
inflation loss upon conversion of the BRL to USD; as the USD would depreciate comparative to the BRL. If US inflation is < BR inflation, the fixed
exchange rate will increase purchasing power and generate a gain when the BRL is converted into USD; as the USD would appreciate comparative to the BRL.
Consequently, borrowing money in BRL and receiving profits in BRL would eliminate inflation risk as it takes cash flows denominated in USD (if we
were to borrow in USD) out of the equation – eliminating the PPP inflation volatility effect - reducing a portion of its exchange rate risk and helping it
have more certainties regarding principal and interest payments to monitor its levered capital investment into Brasilia.
An increase in US interest rates will cause an increase in demand for the Dollar, supply would decrease, and the value of the Dollar would appreciate. A higher
US interest rate, comparative to a foreign currency with a lower interest rate, leads to an increase in demand for US deposits and a decrease in demand for foreign
deposits, leading to an increase in demand for USD and an increased exchange rate for the dollar. However, a strong Dollar places downward pressure on
inflation, which consequently places upward pressure on the dollar and will typically increase unemployment.
5. Problem Assignments: Week 8
Assigned
Problems
1 Ann Page Co. … fixed costs $30,000 per year. Variable costs per unit are $17. Sales price per unit is $30.
a) What is the contribution margin of the product?
Fixed Costs 30,000$
Var $ Per Unit 17$
MSRP 30$
Variable Cost
Per Unit
(VCR) 56.67%
CM Ratio 43.33%
CM Per Unit 13.00$
b) Calculate the breakeven point in unit sales and dollars.
69,230.77$
2,308
c) What is the operating profit (loss) at:
i) 1,500 units per year?
Revenue 45,000$
Var Costs 25,500$
Fixed Costs 30,000$
Profit (NOL) (10,500)$
ii) 3,600 units per year?
Revenue 108,000$
Var Costs 61,200$
Fixed Costs 30,000$
Profit (NOL) 16,800$
d) Plot a breakeven chart using the foregoing figures.
Units 1,500 2,308 3,600
Fixed $ 30,000$ 30,000$ 30,000$
Var $ 25,500$ 39,230.77$ 61,200$
Fixed + Var $ 55,500$ 69,230.77$ 91,200$
Sales 45,000$ 69,230.77$ 108,000$
Profit (NOL) (10,500)$ -$ 16,800$
2 Mrs. Jones owns 100 shares of stock in Daimler-Benz valued at 16.5 Euros per share. What is the value in $U.S. of her stock if:
a) 0.90 € = $1 16.5 EUR Per
Value USD 1,485.00$ Less than 1,650 EUR Good 100 Shares
1,650.00 EUR
b) 0.70 € = $1
Value USD 1,155.00$ Less Good
c) 1.20 € = $1
Value USD 1,980.00$ Greater Good
3 John is planning on purchasing his German dream car for 65,000 Euros
How much does he need in $U.S. if there are 0.98 Euros to the $U.S.?
63,700$ USD
For every unit sold the Contribution Margin Ratio is 43.33% of the Selling Price of $30 or equivalent to $13. This implies the
company makes $13 per unit when accounting for variable costs that increase in proportion with the number of units produced.
When marginal costs = marginal revenue (economies of scale), profitability will be maximized, fixed costs will be spread out,
and variable costs will be efficiently minimized per unit of output.
Breakeven Sales in $ = Fixed Costs/(1-VCR)
Breakeven Sales in Units =Breakeven Sales/MSRP
Since the EUR is worth more than the USD, the EUR-USD conversion will produce a smaller number. When 0.98EUR = $1USD; 65,000
EUR = $63,700USD
When the USD>EUR; the US denominated value of the stock will be greater than the value of the same amount of stock in EURs - and
vice versa. Simply multiply the USD value per EUR with the amount the stock is valued at (16.50 EUR) then multiply this value by the
number of stocks owned (100). When the USD>EUR, her stocks are worth more in USD - and vice versa.
This number implies the firm must make $69,230.77 in Sales Rev to breakeven. Anything less will result in a NOL.
This number implies the firm must sell 2,308 Units to breakeven. Anything less will result in a NOL.
Inferred from the graph, when the firm produces and sells 3,600 units, its fixed costs are spread out more per unit which
decreases the cost per unit sold on a fixed cost basis. This results in a Net Profit vs a NOL (as when the firm sold 1,500 units).
The firm must sell 2,308 units or make $69,230.77 in sales revenue to breakeven. With 1,500 units sold a NOL will result as
the number of units sold is less than what the firm needs to breakeven. Any sales scenario to the right of this breakeven plot,
the firm will make a profit - and vice versa. With a Variable Cost Ratio of 56.67%, sales and profitability are highly sensitive.
1,500 2,308 3,600
$30,000 $30,000 $30,000
$25,500
$39,230.77
$61,200
$55,500
$69,230.77
$91,200
$45,000
$69,230.77
$108,000
-
20,000
40,000
60,000
80,000
100,000
120,000
1 2 3
Profit
Units
Breakeven Sensitivity Analysis
Units
Fixed $
Var $
Fixed + Var $
Sales