A scholarship endowment has a balance of $500,000. Five 1-year scholarships are to be awarded each...

A scholarship endowment has a balance of $500,000. Five 1-year scholarships are to be awarded each year, with the first disbursements of $2,500 per scholarship coming on year from now. The endowment earns a 6% annual interest. If the scholarships are to be offered in perpetuity and the scholarship board wishes to raise the amount of the scholarships by a constant percentage amount each year, what amount of growth is feasible each year?
Calculate the tax liability of a corporation and a partnership earning operating income of $5,000,000, if the corporate tax rate is 21% and the owners; personal tax rate is 24%. Assume that all earnings are distributed to owners.

Refer to Tax Liability. Is there a tax advantage? How much?

3. You deposit $9,000 for 2 years at 3% annual interest. In 2 years, you add $15,000 to your account, but the rate on your account changes to 5% annual interest (for existing balance and new deposit). You leave the account untouched for an additional 20 years. How much do you accumulate?

Expert Solution

jeff jeffy answered 2 years ago

1. Assume that you have applied for two scholarships, a Leadership scholarship (denoted by L) and...

1. Assume that you have applied for two scholarships, a Leadership scholarship (denoted by L) and a Merit scholarship (denoted by M). The probability that you receive a Leadership scholarship is 0.25. The probability of receiving both scholarships is 0.15. The probability of receiving at least one of the scholarships is 0.45. Write the probability statement using the events defined in the problem, e.g., P(L), P(M). Then compute the probability. Use 4-decimal accuracy when necessary. Please show steps. a) [3...

Lida has been awarded a scholarship that will pay $2,500 one year from now. However, Lida...

Lida has been awarded a scholarship that will pay $2,500 one year from now. However, Lida really needs the money today, and has decided to take out a loan. If the interest rate is 8 percent, how much can Lida borrow so that the scholarship will just pay off the loan?

You want to create an endowment to fund a football scholarship, which pays $20,000 per year,...

You want to create an endowment to fund a football scholarship, which pays $20,000 per year, forever, how much money must be set aside today if the rate of interest is 4.7%? a. $682,477 b. $517,698 c. $1,000,000 d. $736,857 e. $425,532

Problem 1: Endowment losses. An American university endowment has experienced severe losses over the past year....

Problem 1: Endowment losses. An American university endowment has experienced severe losses over the past year. The value of the university's endowment is $1B as of today (t=0). The interest rate (i.e. the expected annual investment return on the endowment) is r = 7%. (a) What amount can the university spend from the endowment at t=1 if it would like the amount spent to grow by g=4% per year from then on and has no other resources than the endowment?...

Each year, scholarships worth $25,000 are to be made available to the children of the company's...

Each year, scholarships worth $25,000 are to be made available to the children of the company's employees. If the first scholarships are to be offered annually starting one year from now, what amount must be invested today at 6% compounded semi-annually to fund the scholarship program indefinitely?

We are evaluating a project that costs $500,000 for the equipment, has a five-year life, and...

We are evaluating a project that costs $500,000 for the equipment, has a five-year life, and the market value of the equipment at the end of 5 years is 50,000. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 30,000 units per year. Price per unit is $40, variable cost per unit is $20, and fixed costs are $100,000 per year. The tax rate is 35 percent, and we require a return...

Matthew Industries issued $500,000 of their ten-year, 6% bonds for $535,000. Each $1,000 bond carries five...

Matthew Industries issued $500,000 of their ten-year, 6% bonds for $535,000. Each $1,000 bond carries five warrants that allow the holder to purchase one share of $10 par common stock for $50. Shortly after issuance, the warrants were quoted on the market for $22 each (i.e., for a total of $55,000), and the bonds without the warrants sold in the market at 99 (i.e., for a total of $495,000). The stock warrants should be recorded at $_______________________

On January 1, 2014, Robbins Company issued five-year, $500,000 face value, 8% bonds that paid interest...

On January 1, 2014, Robbins Company issued five-year, $500,000 face value, 8% bonds that paid interest every June 30th and December 31st. The market rate of other similar bonds was 10%. On December 31, 2017, Robbins redeemed the bonds at 102. What was the gain or loss on redemption. Assume that Robbins uses the effective interest method to amortize any premium or discount. (Select the closest answer to the one you calculate): a, $23,619 loss b. $19,300 loss c. $14,765...

To help plan for their retirement, Mary has recently purchased a 20-year endowment insurance with a...

To help plan for their retirement, Mary has recently purchased a 20-year endowment insurance with a yearly premium of $4,000 and a projected maturity value of $170,000. She has also invested $10,000 into a managed fund with a projected return of 8% per year. (a) Estimate the projected future value of the managed fund in 20 years’ time and compute the projected annualised returns of the endowment insurance. (b) Mary was also introduced to an annuity product. Discuss the main...

Below is balance sheet information for five independent situations. Calculate the answer to each. 1. A...

Below is balance sheet information for five independent situations. Calculate the answer to each. 1. A company reports total assets of $3,560 and total liabilities of $740. What is the amount of stockholders' equity? 2. A company reports total liabilities of $1,800 and stockholders' equity of $1,200. What is the amount of total assets? 3. A company reports total assets of $3,000 and total stockholders' equity of $450. What is the amount of total liabilities? 4. A company reports an...

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