Bill plans to open a self-serve grooming center in a storefront. The grooming equipment will cost $410,000. Bill expects aftertax cash inflows of $89,000 annually for seven years, after which he plans to scrap the equipment and retire to the beaches of Nevis. The first cash inflow occurs at the end of the first year. Assume the required return is 14 percent. Required:What is the project’s profitability index (PI)?

Thirty years ago daniel bought a plot of land for $50,000 when the cpi was 50. now the cpi is 180 and he sold the land for $180,000. what issue might inflation cause for daniel?

Which of the following statements is correct? large corporations are taxed more favorably than sole proprietorships. corporate stockholders are exposed to unlimited liability. due to limited liability, unlimited lives, and ease of ownership transfer, the vast majority of u.s. businesses (in terms of number of businesses) are organized as corporations. most businesses (by number and total dollar sales) are organized as partnerships or proprietorships because it is easier to set up and operate in one of these forms rather than as a corporation. however, if the business gets very large, it becomes advantageous to convert to a corporation, mainly because corporations have important tax advantages over proprietorships and partnerships. most business (measured by dollar sales) is conducted by corporations in spite of large corporations’ often less favorable tax treatment, due to legal considerations related to ownership transfers and limited liability.

For each example identify the most appropriate ctso