a. What is Mike’s basis in the
residence?
b. What is Carol’s amount realized from the sale of the
residence?
c. What amount of real estate taxes can Mike deduct?
d. What amount of real estate taxes can Carol deduct?
In: Finance
|
Revenue |
Cost |
Profit |
|
|
Budget |
168,000 |
120,000 |
40% |
|
Actuals |
157,000 |
125,500 |
25% |
|
Variance |
-11,000 |
5,500 |
-15% |
do analysis with this table, and give an advice to make business better
In: Finance
|
Medical expenses before 10%-of-AGI floor |
$30,000 |
|
Casualty loss (not covered by insurance) before statutory floors |
30,000 |
|
Interest on home mortgage |
10,000 |
|
Interest on credit cards |
800 |
|
Property taxes on home |
13,000 |
|
Charitable contributions |
17,000 |
|
State income tax |
15,000 |
|
Tax return preparation fees |
1,200 |
What is the amount of itemized deductions the Thurstons may claim?
In: Finance
Your friend promises you an investing opportunity that she claims has no risk but will provide a guaranteed 20% annual return. (Note: U.S. Treasuries are providing a return of 2%.) What should you do? Group of answer choices Split the difference: put half of your investment in your friend's investing opportunity and half in U.S. Treasuries. This is possible but you should at least check out your friend's track record and if there are investors who have been receiving 20% return anually, go ahead and invest. Don't invest. This sounds like a scam because it is not consistent with the relation between risk and return. This sounds like a sweet deal. Invest $100,000 with your friend.
In: Finance
In 2017, there is a move to repeal the estate and gift tax. This tax, which impacts families with asset transfers exceeding $22 Million, impact few families in the U.S. discuss why so many people, who are not even impacted by this tax, strongly oppose it. Provide an example from your research on a case (different from your peers) regarding death or gift taxes and provide an analysis of the outcome of the case.
In: Finance
explain difference between Operating and Terminal Cash Flow 250 words
In: Finance
In: Finance
Market Top Investors, Inc., is considering the purchase of a $365,000 computer with an economic life of four years. The computer will be fully depreciated over four years using the straight-line method, at which time it will be worth $114,000. The computer will replace two office employees whose combined annual salaries are $95,000. The machine will also immediately lower the firm’s required net working capital by $84,000. This amount of net working capital will need to be replaced once the machine is sold. The corporate tax rate is 24 percent. The appropriate discount rate is 9 percent. Calculate the NPV of this project. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Please help figure out where I am making a mistake:
| Streight line Method depreciation: Accumulated Depreciation = Cost of Asset/Economic Life | |||||
| Year | 0 | 1 | 2 | 3 | 4 |
| Savings in annual cost before tax) | $95,000 | $95,000 | $95,000 | $95,000 | |
| Depreciation Exense | ($91,250) | ($91,250) | ($91,250) | ($91,250) | |
| Net Savings before tax | $3,750 | $3,750 | $3,750 | $3,750 | |
| Less Tax | $2,850 | $2,850 | $2,850 | $2,850 | |
| After Tax Savings | $900 | $900 | $900 | $900 | |
| Initial Investemetn | ($365,000) | ||||
| After Tax Salvage Value | $ 86,640.00 | ||||
| Working Capital | $84,000 | ($84,000) | |||
| Add back depreciation expense | $91,250 | $91,250 | $91,250 | $91,250 | |
| Net Cash Flow | ($281,000) | $ 92,150.00 | $92,150 | $92,150 | $94,790 |
| PV Factor @9% | 1 | 0.917431193 | 0.841679993 | 0.77218348 | 0.77218348 |
| PV | ($281,000) | $ 84,541.28 | $77,560.81 | $71,156.71 | $73,195.27 |
| NPV | $25,454.08 | ||||
In: Finance
In: Finance
Show all steps and equations.
2) You are evaluating two different aluminum milling machines. The Alumina I costs $240,000, has a three-year life, and has pretax operating costs of $63,000 per year. The Alumina II costs $420,000, has a five-year life, and has pretax operating costs of $36,000 per year. For both milling machines, use straight-line depreciation to zero over the project's life and assume a salvage value of $40,000. If your tax rate is 35 percent and your discount rate is 10 percent, which do you prefer? Why?
In: Finance
Consider a company that issues a dual-currency bond with a face
value of €45
million, which pays an interest rate of 3.5 percent a year in
dollars. Indicate
how the company can manage the risk on this bond issue and
calculate the net cash
flows associated with the transactions. A bond with a face value of
€45 million
that pays 5 percent annual interest in euros is available for
purchase. The fixed
rates on a currency swap are 4 percent in dollars and 4.75 percent
in euros and
the exchange rate is €1.15/$. (8)
In: Finance
A fund manager expects to receive a cash inflow of R50,000,000
in three months.
The manager wishes to use futures contracts to take a R30,000,000
synthetic
position in shares and a R20,000,000 in bonds today. The share
would have a beta
of 1.05 and the bond a modified duration of 8.25. A share index
futures contract
with a beta of 0.80 is priced at R300,000 and a bond futures
contract with a
modified duration of 7.50 is priced at R200,000. Calculate the
number of share
index futures contracts and bond futures contracts that the manager
would have to
trade in order to synthetically take the desired position in the
shares and bonds
today. Indicate whether the futures positions are long or
short.
In: Finance
Assume you've generated the following information about the stock of Bufford's Burger Barns: The company's latest dividends of $4.17 a share are expected to grow to $4.55 next year, to $4.96 the year after that, and to $5.41 in year 3. After that, you think dividends will grow at a constant 6% rate. a. Use the variable growth version of the dividend valuation model and a required return of 15% to find the value of the stock. b. Suppose you plan to hold the stock for three years, selling it immediately after receiving the $5.41 dividend. What is the stock's expected selling price at that time? As in part a, assume a required return of 15%. c. Imagine that you buy the stock today paying a price equal to the value that you calculated in part a. You hold the stock for three years, receiving dividends as described above. Immediately after receiving the third dividend, you sell the stock at the price calculated in part b. Use the IRR approach to calculate the expected return on the stock over three years. Could you have guessed what the answer would be before doing the calculation? d. Suppose the stock's current
price is actually $50.91. Based on your analysis from part a, is the stock overvalued or undervalued? e. A friend of yours agrees with your projections of Bufford's future dividends, but he believes that in three years, just after the company pays the $5.41 dividend, the stock will be selling in the market for $55.10. Given that belief, along with the stock's current market price from part d, calculate the return that your friend expects to earn on the stock over the next three years.
In: Finance
I have figured out the risk premium and average risk premium for the question below. I'm having trouble figuring out what the standard deviation of the risk premium is. 2006 18.67 7.50 2007 9.01 7.16 2008 −39.83 2.80 2009 30.90 0.80 2010 20.56 0.92 The average risk premium is 4.03% but can't figure out how to calculate standard deviation of the risk premium.
Yes, an excel function will do.
Thank you.
In: Finance
$100,000 Amortizing Loan
9% Stated Rate
20 Year amortization
Annual payments
-Calculate annual payments
- Prepare amortization table
In: Finance