Dear Tutors,

Please help me find the net bond value and net land value below. Kindly show details and formulas.

11.21: A taxpayer can invest $10,000 in a taxable 10-year bond that yields an annual pretax return of 6 percent or buy land (a capital assets) for $10,000 that is expected to increase at an annual pretax rate of 4 percent. The taxpayer expects to hold the bond and the land for 10 years and expects to pay capital gains taxes of 20% when the land is sold. The taxpayer's marginal tax rate on ordinary income is expected to be 25 percent throughout the 10-year period. Which investment is preferable?

I asked this question below. Would you please explain the answer below if you agree. Thanks so much!

11.26 It is late 2019, and you are a successful executive working in New York for a large company. Tomorrow morning you will have the opportunity to negotiate receiving a $100,000 bonus at the end of the year or an amount of deferred salary in three years. Both you and your employer can earn a before-tax rate of return of 10 percent. Your employer's combined federal and state marginal tax rate is 25 percent and is expected to remain constant throughout the three-year period. Your combined state and federal marginal tax rate is 37%. However, you are being transferred to Florida (which does not have an individual income tax) at the beginning of next year. Accordingly, you expect your marginal tax rate to drop to 30 percent in 2020 and remain constant through 2020. How much deferred salary would your employer be willing to pay you in three years?

a.How much deferred salary would your employer be willing to pay you in three years?

1. PV of 100000 will be $195,200 Please explain how to compute this value.

b.How much deferred salary would you be willing to accept from your employer in three years?

PV will be $297,793.61 Please explain how to compute this value.

c.What should you do?

I should take bonus today if I am moving to Florida.