Mrs. JK recently made a gift to her 19-year old daughter, Alison. Mrs. JK’s marginal income tax rate is 35 percent and Alison’s marginal income tax rate is 15 percent. In each of the following cases, compute the annual income tax savings resulting from the gift. (Keep in mind the assignment of income doctrine in deciding if there will be income tax savings.) a. The gift consisted of a corporate bond paying $7,500 annual interest to its owner.
b. The gift consisted of the $7,500 interest payment on a corporate bond owned by Mrs. JK.
c. The gift consisted of rental property generating $8,300 of annual rental income to its owner.
d. The gift consisted of an $8,300 rent check written by the tenants who lease rental property owned by Mrs. JK.

Sam robinson borrowed $21,000 from a friend and promised to pay the loan in 10 equal annual installments beginning one year from the date of the loan. sam’s friend would like to be reimbursed for the time value of money at a 9% annual rate. what is the annual payment sam must make to pay back his friend?

Which of the following statements about the relationship between economic costs and accounting costs is true? multiple choice accounting costs are equal to or greater than economic costs. accounting costs must always equal economic costs. accounting costs are always greater than economic costs. accounting costs are always less than or equal to economic costs.

Dahlia enterprises needs someone to supply it with 127,000 cartons of machine screws per year to support its manufacturing needs over the next five years, and you’ve decided to bid on the contract. it will cost you $940,000 to install the equipment necessary to start production; you’ll depreciate this cost straight-line to zero over the project’s life. you estimate that in five years, this equipment can be salvaged for $77,000. your fixed production costs will be $332,000 per year, and your variable production costs should be $11.00 per carton. you also need an initial investment in net working capital of $82,000. if your tax rate is 30 percent and your required return is 11 percent on your investment, what bid price should you submit? (do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))