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Ket [755]
3 years ago
12

Sandy earned a salary of $50,000 last year. Her parents gave her a car valued at $23,000 for her birthday. In addition, she earn

ed $1,200 in interest income on a savings account and inherited $75,000 from her grandmother's estate. What is the amount of Sandy's gross income?
Business
1 answer:
IgorLugansk [536]3 years ago
5 0

Answer:

$51,200

Explanation:

Gross income computation includes all forms of income such as wages, rents, royalties, dividend etc. However, gifts and inheritances are not considered as a part of the gross income.

Therefore, Sandy's gross income consist of her salary, and the interest income

Sandy's Gross income = 50000 + 1200

                       = $51,200

The inheritance of her grandmother's estate and car gift are not included as a part of Sandy's gross income.

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Which of the following investments would have the highest future value at the end of 10 years? Assume that the effective annual
LenaWriter [7]

Answer:

The investment that will have the highest future value is option b.

Explanation:

First lets suposse the effective annual rate is 10%  

a. Future value= $2,500  

c. First you must obtain the net present value of all cash flows with the formula attached, for example:  

NVP= ($250/(1+10%)^1)+($250/(1+10%^2)+($250/(1+10%^3)... and so on until year 10  

With the excel formula "NPV" you can calculate the net present value specifying the interest rate, the cash flows.  

The NPV= $1,536.14  

And then you calculate the future value of this answer with this formula:  

VF=VP(1+i)^n  

VF= $1,536.14*(1+10%)^10  

VF=$3,984.36  

b. If payments are due at the beginning of every year means that at year 0 you start with $250. You must calculate the NPV in this way  

NPV= $250+($250/(1+10%)^1)+ )+($250/(1+10%^2)+($250/(1+10%^3)... and so on until year 10  

NPV= $1,786,14

And then you calculate the future value of this answer:

VF= $1,786,14*(1+10%)^10  

VF=$4,632.79

d. First, you must convert the annual interest rate into semi-annually interest

10% Annually effective is 4,88% Semi-anually effective

NPV=$125+($125/(1+4,88%)^1)+ )+($125/(1+4,88%^2)+($125/(1+4,88%^3)... and so on until period 20

NPV=$1,698.75

And then you calculate the future value of this answer:

VF= $1,698 *(1+10%)^10  

VF=$4,405.37

The investment that will have the highest future value is option b.

3 0
3 years ago
7. Opal Lindsay has just taken out a loan at her bank. The bank is charging her 12 percent compounded monthly. How much is Ms. L
guajiro [1.7K]

Answer:

12.68250%.

Formula:

Basic formula for compound interest:

At = A0(1+r)n

where:

A0 : principal amount, or initial investment

At : amount after time t

r : interest rate

n : number of compounding periods, usually expressed in years

3 0
3 years ago
The next dividend payment by Savitz, Inc., will be $2.08 per share. The dividends are anticipated to maintain a growth rate of 6
zavuch27 [327]

Answer:

Required return for Savitz: 10.95%

Explanation:

<u>Considering the gordon model we have to solve for the cost of capital (Ke)</u>

\frac{divends}{return-growth} = Intrinsic \: Value

\frac{divends}{Price} = return-growth

\frac{divends}{Price} + growth = return

$Cost of Equity =\frac{D_1}{P)} +g

D1 2.08

P 42

g 0.06

$Cost of Equity =\frac{2.08}{42} +0.06

Ke 0.10952381

8 0
3 years ago
Read 2 more answers
Elliptical Consulting is a consulting firm owned and operated by Jayson Neese. The following end-of-period spreadsheet was prepa
skad [1K]

Answer and Explanation:

The Preparation of income statement, retained earnings statement, and balance sheet is prepared below:-

<u>                                           Elliptical Consulting</u>

<u>                                            Income statement</u>

<u>                            For the Year Ended June 30, 2016</u>

<u>Particulars                                    Amount</u>

Revenue      

Fees earned                                 $60,000  

Less:

Expenses      

Salary expense               $32,375    

Supplies expense           $2,100    

Depreciation expense    $1,500    

Miscellaneous expense $2,000    

Total expense                                 $37,975  

Net income                                      $22,025

<u>                                        Elliptical Consulting</u>

<u>                                        Retained earning</u>

<u>                             For the Year Ended June 30, 2016</u>

<u>Particulars                                            Amount</u>

Opening balance                                 $52,200  

Add:Net income for the year               $22,025  

Total                                                       $74,225  

Less: Dividends                                       $2,000  

Closing balance of retained

earnings                                                  $72,225

<u>                                     Elliptical Consulting</u>

<u>                                       Balance Sheet</u>

<u>                         For the Year Ended June 30, 2016</u>

<u>Particulars                                            Amount</u>

Assets

Cash                             $27,000  

Accounts receivable   $53,500  

Supplies                       $900  

Total current assets                             $81,400  

Property plant and equipment

Office Equipment      $30,500  

Less:Accumulated

Depreciation              $6,000             $24,500  

Total Assets                                         $105,900  

Liabilities & Stockholder's Equity

Accounts payable     $3,300

Salaries payable        $375

Total liabilities                                      $3,675

Stockholder's Equity    

Common Stock        $30,000  

Retained earnings    $72,225  

total stockholders Equity                    $102,225  

Total liabilities and Stockholder's

Equity                                                    $105,900

8 0
3 years ago
What are the cons of a mixed market economy for most citizens?
Romashka [77]

Answer:

It can be very difficult for citizens to start private businesses. Citizens must pay for most basic necessities by themselves. There is no guarantee of steady employment for many citizens. Citizens may pay higher taxes than in other economic systems.

Explanation:

hope i helped

4 0
3 years ago
Read 2 more answers
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