You are looking at a one-year loan of $11,500. The interest rate on a one-year loan is quoted as 12.4 percent plus two points. What is the EAR of this loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Allgood Textiles, Inc. started the year with $200,000 in accumulated earnings and profit. During the year, it earned $75,000 from its business operations, received a $2,000 federal income tax refund, received a $10,000 contribution to capital from its shareholders, paid $13,750 in federal income taxes, and could not deduct $1,000 of its meal expenses. What is the amount of its accumulated earnings and profits at the end of the year?

Mary’s AGI for the year is $30,000. She paid the following amounts during the current year:

Amount         Purpose

$2,500             Interest on $100,000 mortgage to acquire personal residence

     550           Points paid to obtain the mortgage

     850             Interest on auto loan (auto is used 100% for personal purposes)

Mary’s current year interest itemized deduction after any applicable floor is:

a.   $3,900.

b.   $3,350.

c.   $3,050.

d.   $2,500.

e.   none of the above.

2.   Jon’s AGI for the year is $40,000. He paid the following amounts during the current year:

Amount            Purpose

   $150                Interest on business-related loan

     325                Finance charges paid on credit cards

     550                Interest on loan used to purchase municipal bonds

Jon’s current year interest itemized deduction after any applicable floor is:

a.   $0.

b.   $150.

c.   $550.

d.   $1,025.

e.   none of the above.

3.   Devon’s AGI for the year is $50,000. Devon paid the following amounts during the current year:

Amount              Purpose

$3,750                 Interest on $150,000 mortgage to acquire rental property

1,000                Interest on $35,000 home equity loan

1,750                 Interest on Devon’s sister's home mortgage. His sister was laid off from her job and was unable to make her home mortgage payments. Devon is not an official co-signer on the loan.

Devon’s current year interest itemized deduction after any applicable floor is:

a.   $6,500.

b.   $2,750.

c.   $1,000.

d.   $0.

e.   none of the above.

4.   In 2019, Shasta paid monthly escrow payments totaling $3,600 (i.e., $300 per month) to her mortgage company to cover her real estate taxes for the year. The mortgage company used the funds in Shasta’s escrow account to pay her real estate tax bill of $3,400 on October 1, 2019. Shasta’s AGI is $40,000. Her itemized deduction for taxes after any applicable floor is:

      a.   $3,600.

      b.   $3.400.

      c.   $2,700.

      d.   $0.

      e.   none of the above.

This year Lloyd, a single taxpayer, estimates that his tax liability will be $11,500. Last year, his total tax liability was $16,000.

He estimates that his tax withholding from his employer will be $8,750.

a. How much does Lloyd need to increase his withholding by (for the year), in order to avoid the underpayment penalty?

b. Assuming Lloyd does not make any additional payments, what is the amount of his underpayment penalty? Assume the federal short-term rate is 5 percent. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)

The price of a one-year zero-coupon bond is $943.396, the price of a two-year zero is $873.439, and the price of a three-year zero-coupon bond is $793.832. The bonds (each) have a face value of $1,000. Assume annual compounding.

a) Come the yield to maturity (YTM) on the one-year zero, the two-year zero, and the three-year zero.

b) Compute the implied forward rates for year 2 and for year 3.

c) Assume that the expectations hypothesis is correct. Based on your answers to parts a) and b), can you conclude that interest rates are expected to rise? Explain.

d) If the expectations hypothesis is correct, what will the pure yield curve be next year? [In other words, compute the yields on both a one-year zero and a two-year zero in one year from today.] Use the data from your answers to parts a) and b).

Colsen Communications is trying to estimate the first-year cash flow (at Year 1) for a proposed project. The financial staff has collected the following information on the project:

The company has a 40% tax rate, and its WACC is 11%.

Write out your answers completely. For example, 13 million should be entered as 13,000,000.

a-What is the project's cash flow for the first year (t = 1)? Round your answer to the nearest dollar.
$

b-If this project would cannibalize other projects by $2.5 million of cash flow before taxes per year, how would this change your answer to part a? Round your answer to the nearest dollar.
The firm's project's cash flow would now be $ .

c- Ignore part b. If the tax rate dropped to 30%, how would that change your answer to part a? Round your answer to the nearest dollar.
The firm's project's cash flow would -Select-increasedecreaseItem 3  by $ .

) What is the present value of an ordinary 12-year annuity that pays $1,000 per year when the interest rate is 7%? a. $7,942.70 b. $8,942.71 c. $9,942.72 d. $10,942.56 e. None of the above.

On the first day of the fiscal year, a company issues a $3,200,000, 9%, 10-year bond that pays semiannual interest of $144,000 ($3,200,000 × 9% × ½), receiving cash of $2,649,441.

Journalize the first interest payment and the amortization of the related bond discount. Round to the nearest dollar. If an amount box does not require an entry, leave it blank.

B. A series of 25 end-of-year deposits beginning with $1135 at the end of year 1 and increasing by $260 per year with a 6% interest rate. What Uniform Series of deposits would result in the same cumulative balance? $

C. John makes 35 end-of-year deposits into a retirement account that returns 5.0.% per year compounded annually. His first deposit is $7500 and he increases the deposits by 8.9% each year. How much will be in the account immediately following the 35th deposit? $

The scenario:

Sean and Jonah are both 20 year old 2nd year students at EWU. They both still live with their parents, 5 houses down from one another in Cheney Washington. They are and have been best friends sense Jona moved to the block in second grade. Sean’s Grandmother has just passed away and the scene takes place at Sean’s family home where they are celebrating his Grandmothers life with a wake. Sean is sitting on the foot of his bed with his door about half open.

Sean: he is slouched over gazing into his coffee cup clutched by both hands, he glances up and notices Jonah at the door then returns to his gaze. “I don't know what to think Jonah, I loved my Grandma. She was always such a bright ray of sunshine in my life. I just feel overwhelmed… I was to young when my Grandpa passed away to remember how I felt. I just feel lost Jonah.”

Jonah: Jonah leans against the door frame, looking at Sean with a soft face and voice. “Man, Sean I’m sorry. Your Grandma truly was a wonderful woman.”

Sean: looking at Jonah with tears in his eyes and a cracking voice. “Thanks Jonah, that means a lot to me. I know she loved you and thought of you as family too. Do you remember that time we went….

Jonah: Excitedly interrupts Sean, smiling. “Hey man did you by chance get those tickets to the game for Jake and I?”

Sean: Making eye contact with Jonah, and showing a confused face. “Wait what are you talking about Jonah? My Grandmother is gone man…”

Jonah: _________________________________________________

Created by: Cody Beaver & Thomas Ghezzi

Discussion Guidelines:

So here's what you are to do. Read and enjoy the different presented scenarios while you search for the scenario you want to respond to:

1. Respond to a scenario by telling us the actual verbal and nonverbal message you will use.

For example, "(1) I will nod my head and look compassionately at Fred and say, 'Yes, if I understand you correctly you're saying that not only do you really disagree with what your boss said but you're angry that he even said it to you."

2. Then label exactly what your utterance was and why it is accurately labeled.

For example, "(2) This is a paraphrase because it is verifying information without using Fred's own words and while including both the emotion and the content of the message."

3. Tell us why you think this is one of the better responses to have chosen as your response.

For example, "(3) I think Fred needed confirmation that I was listening and understanding him at that point in the conversation. I also think that a non-evaluative paraphrase might let him know that I'm ready to hear him tell me more -- to encourage him to keep speaking."

4. THE FINAL TASK -- Respond to one of your colleague's responses and note an additional concept from your readings s/he did with their response but was not mentioned in their analysis. This can be a wonderful thing they did or it could be a "be careful" this could be interpreted negatively type of issue. Be sure you appropriately label the concept, define the concept, and explain how you see it being used in their response.

PLEASE NOTE THAT YOU NEED TO NUMBER YOUR RESPONSES SO I KNOW EXACTLY WHICH OF YOUR RESPONSES YOU ARE CLAIMING TO HAVE FULFILLED WHICH PART OF THE ASSIGNMENT. For an example of this, note that in each example above I have used the number of the step in the assignment that I am referring to.