Marc and Michelle are married and earned salaries this year of $64,000 and $12,000, respectively. In addition to their salaries, they received interest of $350 from municipal bonds and $500 from corporate bonds. Marc contributed $2,500 to an individual retirement account, and Marc paid alimony to a prior spouse in the amount of $1,500 (under a divorce decree effective June 1, 2005). Marc and Michelle have a 10-year-old son, Matthew, who lived with them throughout the entire year. Thus, Marc and Michelle are allowed to claim a $2,000 child tax credit for Matthew. Marc and Michelle paid $6,000 of expenditures that qualify as itemized deductions and they had a total of $3,500 in federal income taxes withheld from their paychecks during the year.
a. What is Marc and Michelle’s gross income?
b. What is Marc and Michelle’s adjusted gross income?
c. What is the total amount of Marc and Michelle’s deductions from AGI?
d. What is Marc and Michelle’s taxable income?
e. What is Marc and Michelle’s taxes payable or refund due for the year?
In: Accounting
Calculate the value of a stock with the following expectations for dividend payments: $1.75 in Year 1, $2.00 in Year 2, and then annual dividend growth of 1.5% per year indefinitely. Assume a discount rate of 9%. Solve the problem two different ways: first by using the algebraic formula for the Gordon Growth Model combined with PV of uneven dividend payments, then by using Excel to calculate and sum the dividends and their respective present values for the next 150 years
In: Finance
HCJ Corporation is completing their cash budget for the following year. They are going to buy an industrial robot. They will make the acquisition on January 2 of next year, and it will take most of the year to train the personnel and reorganize the production process to take full advantage of the new equipment.”
The robot will cost $1,000,000 financed with a a one-year $1,000,000 loan from My Bank and Trust Company. I’ve negotiated a repayment schedule of four equal installments on the last day of each quarter.
The interest rate will be 10 percent, and interest payments will be quarterly as well
HCJ Corporation is a manufacturer of metal picture frames. The firm’s two product lines are designated as S (small frames; 5 x 7 inches) and L (large frames; 8 x10 inches). The primary raw materials are flexible metal strips and 9-inch by 24-inch glass sheets. Other raw materials, such as cardboard backing, are insignificant in cost and are treated as indirect materials.
Here is the provided budget information
1. Sales in the fourth quarter of 20x0 are expected to be 50,000 S frames and 40,000 L frames. Over the next two years, sales in each product line will grow by 5,000 units each quarter over the previous quarter. For example, S frame sales in the first quarter of 20x1 are expected to be 55,000 units.
2. HCJ's sales history indicates that 60 percent of all sales are on credit, with the remainder of the sales in cash. The company’s collection experience shows that 80 percent of the credit sales are collected during the quarter in which the sale is made, while the remaining 20 percent is collected in the following quarter. (For simplicity, assume the company is able to collect 100 percent of its accounts receivable.)
3. The S frame sells for $10, and the L frame sells for $15. These prices are expected to hold constant
throughout 20x1.
4. HCJ's production team attempts to end each quarter with enough finished-goods inventory in each product line to cover 20 percent of the following quarter’s sales. Moreover, an attempt is made to end each quarter with 20 percent of the glass sheets needed for the following quarter’s production. Since metal strips are purchased locally, HCJ buys on a just-in-time basis; inventory is negligible. The purchase and production quantities are shown.
5. All direct-material purchases are made on account, and 80 percent of each quarter’s purchases are paid in cash during the same quarter as the purchase. The other 20 percent is paid in the next quarter.
6. Indirect materials are purchased as needed and paid for in cash. Work-in-process inventory is negligible.
7. Projected manufacturing costs in 20x1 are as follows:
Direct material:
Metal strips. @ $1 per foot
Glass sheets: $8 per sheet
Direct labor for both products .1 hour @ $20 per hour
Manufacturing overhead: .1 direct-labor hour @ $10 per hour
Total manufacturing cost per unit . S: $7 L: $10
1. Sales budget:
2. Cash receipts budget:
3. Cash disbursements budget: (including purchases of direct materials and payments for same)
4. Summary cash budget:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In: Finance
The year 2014 was a nightmare for James Littleton. In January 2014, Littleton was diagnosed with Type 2 (adult onset) diabetes. In June, Littleton's physician expressed concern regarding the lack of circulation in his left leg, and in October, a circulatory specialist recommended that the left leg be amputated to the knee; reluctantly, but resigned to his fate, Littleton agreed.
On November 1, Littleton is admitted to Pinecrest General Hospital for surgery. In what can only be described as a horrible and catastrophic mistake, the surgeon misreads the diagnosis and surgical instructions and amputates Littleton's right leg by mistake. Littleton's left leg is amputated the next day.
Confined to a wheelchair, but supported by the love, care, and concern of his family, Littleton visits the offices of a local Pinecrest law firm, Stephenson, Gordon, and Ratcliff, which is a general partnership. Stephenson and Gordon agree to represent Littleton in the medical malpractice lawsuit and sign a contract of representation with Littleton, agreeing to represent him for the standard one-third contingency fee, plus associated expenses.
The statute of limitations for medical malpractice actions in the state is three years. Because of oversight and neglect (rumor has it that both Stephenson and Gordon have substance abuse problems), the firm fails to file a complaint against the attending surgeon and Pinecrest General Hospital within the three-year period. Even though he lacks legal training, Littleton knows he will be forever barred from bringing a lawsuit against the doctor and the hospital.
Having experienced catastrophic neglect from two professions he once respected, Littleton focuses his energy on bringing Stephenson, Gordon, and Ratcliff to justice. He sues the general partnership, as well as the individual attorneys, Stephenson, Gordon, and Ratcliff, for legal malpractice.
Ratcliff's attorney moves for dismissal of the claim against his client individually, arguing that Ratcliff was not an attorney of record for Littleton and, as a result, should be dismissed personally from the lawsuit.
What is the applicable rule for partnership liability? Will Physician Ratcliff succeed in his motion for dismissal? Why or Why not? Please explain.
In: Operations Management
A. What is the value today of a money machine that will pay $1,385.00 per year for 13.00 years? Assume the first payment is made 5.00 years from today and the interest rate is 6.00%.
B. What is the value today of a money machine that will pay $3,787.00 every six months for 29.00 years? Assume the first payment is made 4.00 years from today and the interest rate is 12.00%.
In: Finance
A) Given the year end prices of the following stocks, estimate the expected return of a portfolio of 30% AAA and 70% BBB. Enter your answer as a percent without the % sign. Round your final answer to two decimals.
B) Given the year end prices of the following stocks, estimate the standard deviation of the returns of a portfolio of 30% AAA and 70% BBB. Enter your answer as a percent without the % sign. Round your final answer to two decimals.
| Year | AAA | BBB |
|---|---|---|
| 2006 | 100 | 55 |
| 2007 | 105 | 65 |
| 2008 | 120 | 60 |
| 2009 | 110 | 70 |
| 2010 | 130 | 65 |
| 2011 | 160 | 80 |
In: Finance
Suppose that over a year the daily percent change (+ or -) for
the S&P 500 adjusted closing value is approximately normally
distributed with a mean of +0.03% and a standard deviation of
0.97%. Use this model to answer the following questions. Show all
calculations. Show the standardization calculations.
a) For a randomly selected trading day, what the is probability
that the percent change is less than +1.50%?
b) For what proportion of the trading days is the percent change between -2.00% and +2.00%?
c) What is the 3rd quartile of the percent change?
d) The 80th percentile?
In: Math
You are a nonprofit manager and you are preparing for the upcoming fiscal year. You are in charge of leading the budget process for the organization. Briefly describe how you would start to prepare the organization’s budget. What considerations would you need to take into account? Who would you involve in the process? What are the timeline and key activities of the budget process? Once your budget is developed, what steps would you take to ensure the organization is on track to meet its budget?
Preparing a Budget
o Describe the key steps you would take to prepare your nonprofit organization’s budget. Cite at least one academic source to support your response.
o Discuss the considerations that you would need to take into account when preparing the nonprofit organization’s budget. Cite at least one academic source to support your response.
o Describe individuals involved in the budgeting process. o Outline the budgeting process timeline and key activities.
Ongoing
o Describe the steps you would take to ensure the organization is on track to meet its budget.
In: Accounting
1.) What is the depreciation expense in Year 1 (in $s) and after tax OCF in year 1?
2.) What is the depreciation expense in Year 2 (in $s) and after tax OCF in year 2?
3.) What is the depreciation expense in Year 3 (in $s) and after tax OCF in year 3?
4.) What is the after tax salvage value of the equipment at the end of year 3
5.)What is the terminal cash flow (the last cash flow of the project not including the OCF)?
6.) What is the initial investment in this project (enter as a negative number)?
7.) What is the projects NPV?
Frito Lay is considering a new line of potato chips. This will be a three year project.
a. Frito Lay paid $1,000,000 last year to a winning person who thought of the new line of potato chips.
b. New equipment will cost $6,000,000 and depreciation is by the 3-year MACRS method. Purchase of the equipment will require an increase in net working capital of $600,000 at time 0 (which will be recaptured at the end of the project).
c. The new potato chips will generate an additional $5,000,000 in revenues in the first year, $4,000,000 in revenues in in the second year, and $2,000,000 in revenues the third (final) year revenues.
d. In addition to the additional revenues outlined in c. The new potato chips will decrease existing chip line revenues by $2,000,000 the first year, $1,000,000 the second year, and $500,000 the third year.
e. The new project is estimated to have expenses of $150,000 each year.
f. At the conclusion of the project, the equipment can be sold for $1,000,000.
g. The firm’s marginal tax rate is 20 percent, and the project’s cost of capital is 10 percent.
The following is the MACRS Depreciation Table:
|
Year |
3-year |
5-year |
7-year |
|
1 |
33.33% |
20.00% |
14.29% |
|
2 |
44.44% |
32.00% |
24.49% |
|
3 |
14.82% |
19.20% |
17.49% |
|
4 |
7.41% |
11.52% |
12.49% |
|
5 |
11.52% |
8.93% |
|
|
6 |
5.76% |
8.93% |
|
|
7 |
8.93% |
||
|
8 |
4.45% |
In: Finance
different cash flow. given the following cash flow at the end of each year, what is the future value of this cash flow at 3%, 9%, and 18% interest rates at the end of year 7?
year
1.
$15,000
year
2.
$20,000
year
3.
$29,000
year4 through 6. $0
year
7.
$130,000
In: Finance