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daser333 [38]
3 years ago
6

An IRA uses immediate annuities to pay out benefits; the IRA owner is nearly 75 years old when he decides to collect distributio

ns. What kind of penalty would the IRA owner pay?
Business
1 answer:
soldier1979 [14.2K]3 years ago
3 0

Answer:

50% tax on the amount not distributed as required

Explanation:

In this specific scenario, the individual will have to pay a penalty of 50% tax on the amount not distributed as required. This is mainly due to the fact that traditional IRA accounts require that distribution of benefits must begin no later than age 70½ if immediate annuities are used to pay for them. Failure to do so would have a consequence of a 50% tax on the undistributed amount, and must be paid by the owner of the account.

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You decide to form a portfolio of the following amounts invested in the following stocks. What is the expected return of the por
cluponka [151]

Answer: Expected return of the portfolio = 14,70%

Explanation: First we must add the amounts to calculate the total capital:

1000 + 7000 + 6000 + 6000 = $20000

The performance of a portfolio is given by the sum of each individual expected return weighted by its weight in capital.

Therefore we must calculate the weight (w) of each type of action:

W (apple) = 1000 / 20000 = 0,05

W (microsoft) = 7000 / 20000 = 0,35

W (ford) = 6000 / 20000 = 0,30

W (time warner) = 6000 / 20000 = 0,30

Expected return of the portfolio : (0,1050 . 0,05) + (0,1690 . 0,35) + (0,1575 . 0,30) + (0,1180 . 0,30) = 0,14705 = 14,70%

3 0
3 years ago
On Joe Martin’s graduation from college, Joe’s uncle promised him a gift of $12,000 in cash or $900 every quarter for the next 4
iris [78.8K]

Answer:

Instructions are below.

Explanation:

Giving the following information:

Option 1:

$12,000 cash now

Option 2:

$900 every quarter for 4 years.

Interest rate= 8% compounded quarterly

We need to determine the present value of option 2.

First, we need to calculate the future value of the investment. We will use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= cash flow= 900

n= 4*4= 16

i= 0.08/4= 0.02

FV= {900*[(1.02^16)-1]} / 0.02

FV= $16,775.36

Now, we determine the present value:

PV= FV/(1+i)^n

PV= 16,775.36/(1.02^16)

PV= $12,219.94

It is more profitable to accept option 2. It provides the highest present value.

4 0
3 years ago
For March, sales revenue is $1,000,000, sales commissions are 5% of sales, the sales manager's salary is $80,000, advertising ex
Nitella [24]

Answer:

$217,100

Explanation:

total selling expenses = sales commission + sales manager's salary + shipping expense + advertising expenses + miscellaneous selling expenses

sales commissions = 50,000

advertising expenses = 65,000

shipping expenses = 10,000

sales manager's salary= 80,000

miscellaneous selling expenses = 10,000 + 2100

3 0
3 years ago
Howat Corporation earned $360,000 during a period when it had an average of 100,000 shares of common stock outstanding. The comm
Lyrx [107]

Answer:

The answer is:

A. Yes

B. 3.6

C. 3.43

Explanation:

A. Yes, the warrants is dilutive because the average market price($15) is higher than option price($10).

B. Since there is no preferred shares or preferred dividends, the basic earnings per share is:

Net income ÷ weighted average shares

= $360,000 ÷ 100,000 shares

= 3.6

C. First we need to find the incremental shares. The formula is:

[(average market price - option price) ÷ average market price]x number of shares

[($15 - $10) ÷ $15] x 15,000 shares

$0.33333 * 15,000 shares

5,000 shares

Total number of shares is now 105,000shares(100,000 shares + 5,000)

Therefore, diluted shares is now

$360,000 ÷ 105,000 shares

3.43

6 0
3 years ago
Mark is interested in becoming a bio
maxonik [38]

Answer:

ok

Explanation:

4 0
3 years ago
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