You Are Working on a Bid to Build Two Apartment

question 95

Multiple Choice

You are working on a bid to build two apartment buildings a year for the next 5 years for a local college.This project requires the purchase of $750,000 of equipment that will be depreciated using straight-line depreciation to a zero book value over the project's life.The equipment can be sold at the end of the project for $325,000.You will also need $140,000 in net working capital over the life of the project.The fixed costs will be $628,000 a year and the variable costs will be $1,298,000 per building.Your required rate of return is 14.5 percent for this project and your tax rate is 35 percent.What is the minimal amount,rounded to the nearest $100,you should bid per building?

• A)$1,423,700
• B)$1,489,500
• C)$1,733,000
• D)$2,780,600
• E)$3,465,900

Recognize deductions available for self-employed taxpayers, including self-employment taxes and health insurance premiums.

Identify the conditions under which moving expenses can be deducted, including distance and employment tests.

Determine the deductible amount of student loan interest based on the adjusted gross income (AGI) and phase-out rules.

Understand the tax treatment of alimony payments and the criteria that differentiate them from other types of payments.

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Definitions:

Middle and Working Classes

Social groups categorized by their economic status, occupational types, and levels of income, where the middle class typically includes those with moderate incomes and white-collar jobs, and the working class includes those with lower incomes and blue-collar or manual labor jobs.

Liberal Democracy

A political system characterized by free and fair elections, rule of law, and the protection of individual rights and freedoms.

Ruling Class

The social class that holds the dominant power in a societal hierarchy, often controlling resources and making key decisions.

Autocracy

Absolute power resides in the hands of a single person or party.