Posted by admin on May 13th, 2017

Effective Management Skills – Investment Evaluation Criteria

Three steps are involved in the evaluation of an investment:

• Estimation of cash flows

• Estimation of the required rate of return (the cast of capital)

• Application of a decision rule for decision rule for making the choice

Investment decision rule

The investment decision rules may be referred to as capital budgeting techniques, or investment criteria. A sound appraisal technique should be used to measure the economic worth of an investment project. The essential property of a sound technique is that is should maximize the shareholders wealth. The following other characteristics should also be possessed by a sound investment evaluation criterion:

• It should consider all cash flows to determine the true profitability of then project.

• It should provide for an objective and unambiguous way of separate good projects from bad projects.

• It should help ranking of projects according to their true profitability.

• It should recognize the fact that bigger cash flows are preferable to smaller ones and early cash flows are preferable to later ones.

• It should help to choose among mutually exclusive projects that project which maximizes the shareholders wealth.

• It should be a criterion which is applicable to any conceivable investment project independent of others.

These conditions will be clarified as we discuss the features of various investment criteria in the following posts.

Investment Appraisal Criteria

A number of investment appraisal criteria or capital budgeting techniques are in use of practice. They may be grouped in the following two categories:

1. Discounted cash flow criteria

• Net present value

• Internal rate of return

• Profitability index (PI)

2. Not discounted cash flow criteria

• Payback period

• Accounting rate of return

• Discounted payback period

Discounted payback is a variation of the payback method. It involves discounted method, but it is not a true measure of investment profitability. We will show in our following posts the net present value criterion is the most valid technique of evaluating an investment project. It is consistent with the objective of maximizing the shareholders wealth.

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Posted by admin on May 11th, 2017

Red Flags, Taxes: Your “Bill of Rights”

 

Did you know that you have a bill of rights? Probably, but not a “bill of rights” for taxes.
Well, there is a “bill of rights” for taxes and as a tax payer, you should be aware of them.

 

There is an article on the wires today that talks about red flags and why not to do something. If you have read the taxpayers bill of rights “you have the right to pay the correct amount of taxes”. Having the right and knowing how to exercise that right are two different things.

Red flags exist because historically the deduction is not taken properly which is with documentation ergo be prepared. The first of the CNN red flags was charitable contributions, for most of us this is not an issue, but for the 300K or higher earners and business owners this is the number one best deduction you can have to lower you AGI. Through conservation easements and historical building easements you can lower your AGI by 50% when approved by congress this year. It is a savvy tool, you will need help but that brings us back to the other tax payer right, the right to representation.

Home office- Red flag, don’t take no for an answer, we teach you how to document this for a proper deduction, the IRS was having such a hard time they put in an option to take the home office for $5 a sq. ft. this year to make it easy. If you take the later you probably will leave money on the table.

Bizarre deductions – is also noted, again there may be a good reason for such things. There are many things under health care that are allowed and may be bizarre, like a swimming pool. For some, this is a quality of life thing as it is a form of rehabilitation with a prescription from a doctor. Tax Saving Professionals is not in the business to justify all deductions, but all of us have a way to get a Private letter ruling which is an approval before taking a deduction from the IRS if you think it is bizarre. What we do is consult and provide the best possible interpretation of the tax code to your benefit as it is 73,954 pages long.

If all of this is new or news to you, then you might be overpaying your taxes. We service high net worth clients in excess of $300K per year and business owners with revenues of $1M and above.

by Ray Phair, COO, Tax Saving Professionals

 

 

CNN Money : IRS Red Flags

 

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Posted by admin on November 25th, 2016

Taxact.com – Where is Magic Money? – Working Capital Video Definition



Taxact.com – Bookkeeping Services, Payroll And CA Income Tax Services |A&C



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Posted by admin on November 17th, 2016

HRblock.com – What Is Magic Big Tax Break for Thousands & Billionaires?



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Posted by admin on September 9th, 2016

Want To Know All You Need to know about QuickBooks Inventory?


This video shows you full information for your Inventory’s knowledge.


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Posted by admin on August 29th, 2016

Accounting Help – Quickbooks Inventory Tutoring


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