Feldblum.Surplus - Challenge 02 - Revision history

Graham at 02:54, 19 April 2019

2019-04-19T02:54:22Z

Graham at 02:54, 19 April 2019

2019-04-19T02:54:10Z

Graham at 02:53, 19 April 2019

2019-04-19T02:53:09Z

Graham at 02:51, 19 April 2019

2019-04-19T02:51:41Z

Graham: Created page with "{| class='wikitable' |- | '''Solved!''' Shout-out to Mark Maenche! ''(Apr 6-2019, in 12 hrs, 47 mins after posting)''. |} * tax rate that ma..."

2019-04-07T21:13:58Z

Created page with "{| class='wikitable' |- | '''Solved!''' Shout-out to Mark Maenche! ''(Apr 6-2019, in 12 hrs, 47 mins after posting)''. |} * tax rate that ma..."

New page

{| class='wikitable'
|-
| '''Solved!''' Shout-out to Mark Maenche! ''(Apr 6-2019, in 12 hrs, 47 mins after posting)''.
|}

* tax rate that makes the decision between liquidation and continued operations irrelevant: '''29.8%'''
:    ==> solve for tax: (invested capital) = (original pre-tax income) ⋅ (1 - tax) / (% CoC)
:    ==> 292.5 = 50 ⋅ (1 - tax) / 0.12
:    ==> tax = 29.8%

* pre-tax income that makes the decision between liquidation and continued operations irrelevant: '''54.0'''
:    = (invested capital) / PV(future income) x (original pre-tax income)
:    = 292.5 / 270.8 * 50
:    = 54.0

{| class='wikitable'
|-
| '''Honorable Mention!''' Chris B. ''(Apr 6-2019, in 19 hrs, 9 mins after posting)''.
|}

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−	[[Feldblum.Surplus#Problem_Type:_Liquidate_or_Continue_Operations \| Back to wiki article]]	+	''[[Feldblum.Surplus#Problem_Type:_Liquidate_or_Continue_Operations \| Back to wiki article]]''

← Older revision		Revision as of 02:54, 19 April 2019
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	\| <span style="color: purple;">'''Honorable Mention!'''</span> Chris B. ''(Apr 6-2019, in 19 hrs, 9 mins after posting)''.		\| <span style="color: purple;">'''Honorable Mention!'''</span> Chris B. ''(Apr 6-2019, in 19 hrs, 9 mins after posting)''.
	\|}		\|}
		+
		+	[[Feldblum.Surplus#Problem_Type:_Liquidate_or_Continue_Operations \| Back to wiki article]]

← Older revision		Revision as of 02:53, 19 April 2019
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−	There was an error in the problem ~~so the submitted answers had to be corrected~~. This was not the fault of the ~~submitters~~ so I have kept their shout-outs intact but have updated the answers to be consistent with the current version of the problem.	+	There was an error in the <u>original</u> version of the problem. This was not the fault of the individuals who submitted correct answers to that version so I have kept their shout-outs intact, but have updated the answers to be consistent with the <u>current</u> version of the problem.

	{\| class='wikitable'		{\| class='wikitable'

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-* tax rate that makes the decision between liquidation and continued operations irrelevant: '''29.8%'''
+* tax rate that makes the decision between liquidation and continued operations irrelevant: '''37.0%'''
-: &nbsp;&nbsp; ==> solve for <u>tax</u>: (invested capital) = (original pre-tax income) &sdot; (1 - tax) / (% CoC)
+: &nbsp;&nbsp; ==> solve for <u>tax</u>: (invested capital - CoL) = (original pre-tax income) &sdot; (1 - tax) / (% CoC)
-: &nbsp;&nbsp; ==> 292.5 = 50 &sdot; (1 - tax) / 0.12
+: &nbsp;&nbsp; ==> (292.5 - 30) = 50 &sdot; (1 - tax) / 0.12
-: &nbsp;&nbsp; ==> tax = <u>29.8</u>%
+: &nbsp;&nbsp; ==> tax = <u>37.0</u>%
-* pre-tax income that makes the decision between liquidation and continued operations irrelevant: '''54.0'''
+* pre-tax income that makes the decision between liquidation and continued operations irrelevant: '''48.462'''
-: &nbsp;&nbsp; = (invested capital) / PV(future income) x (original pre-tax income)
+: &nbsp;&nbsp; = (invested capital - CoL) * CoC / (1 - %tax)
-: &nbsp;&nbsp; = 292.5 / 270.8 * 50
+: &nbsp;&nbsp; = (292.5 - 30) * 0.12 / (1- %tax)
-: &nbsp;&nbsp; = <u>54.0</u>
+: &nbsp;&nbsp; = <u>48.462</u>
 {| class='wikitable'