Hi, Perhaps this question is a little stupid… In the “Inger” example in the texts, in the CF analysis of Peter and Hilda (page 166), they not only include the transfer to their grandson as a expense (which is ok), but also the 50% tax of the transfer… which does not make a lot of sense to me. Actually, I gess that tax should not appear on their analysis, but only if we do a separate analysis for the grandson (ie, the transfer as an inflow and the tax as an outflow). Also, to get the necessary rate of return, they get the investable assets starting with year one cash flow… but what happens to the current year cash flow which is negative? shouldn´t it decrease net worth? Am I missing something or just freaking out with the very first number that appears in the texts? Thanks
for the grandson transfer, they want Jurgen to receive full $15k, but to make it happen $7,500 wealth tarnsfer tax has to be paid. Essentialy Ingers are making $22,500 payment, in other words making tax payment for Jurgen and assuring he gets $15k