Question

Below are Ms. Shawn 's income's for 2016 and 2017, and estimated income from 2019. Determine if Ms. Shawn is required to make installment payments, and which alternative would be preferred for each case presented.

Case A

2019 estimated 4000

2018 1000

2017 2500

Case B

2019 estimated 3000

2018 4000

2017 3500

Case C

2019 estimated 1000

2018 3000

2017 5500

Case D

2019 estimated 4000

2018 nil

2017 3500

this is a full question,

Answer 1

Assuming that the information presented is for 2017, 2018 instead of 2016, 2017 and projected income for 2019.

We have to understand the growth of the company by its positive or negative projection of the income to conclude whether the company should make installment payments or not.

Case A

2017 to 2018 shows a fall from 2500 to 1000 and 2019 estimates 300% increase i.e. 4000 from 2018. Which can be achieved, but it seems far fetched. On this basis the company can make installment payment provide the estimate is fulfilled. And so this is a possible alternative.

Case B

2017 to 2018 shows a increase in the income by approx 14 per cent but there is an estimated fall in the income by 25%. This estimates makes the 2019 income even less than the 2017 income. This is not a suitable alternative. The installment is not required to be made.

Case C

2017 to 2018 and to 2019 there is a projected fall in the income and so the installment payment is not required to be made.

Case D

2017 to 2018 there is a 100% decline and 2019 is expected to have a positive income is bleak but such increase warrants for installment payments. Although Case A is more suitable.

Conclusion:

Out of all the cases Case A seems to be most promising and would be the suitable alternative for the installment payment.