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SVETLANKA909090 [29]
3 years ago
15

Customer Z is a single 26-year-old man who earns $125,000 annually. He informs you that he is getting married and that his new w

ife's income of $75,000 per year will put them into the highest federal tax bracket. The couple will have investable income of $25,000 per year. The couple wishes to buy a house in 5 years that will be substantially more expensive than the condominium in which they currently reside. To meet the customer's needs for the large cash down payment in 5 years and to reduce taxable income, the BEST recommendation is to:_____________.
A. open a margin account and invest in income bonds
B. open an Individual Retirement Account and invest in tax-deferred variable annuities
C. open a cash account and invest in mutual funds holding high yielding common and preferred stocks
D. open a trust account and invest in Treasury STRIPs
Business
1 answer:
Leto [7]3 years ago
4 0

Answer: C. open a cash account and invest in mutual funds holding high yielding common and preferred stocks

Explanation:

Investing in Mutual funds which hold high yielding common and preferred shares is the best option here. The dividends received will be high enough but will not be taxed too much as dividend tax is limited to 15% thereby saving the investment on taxes.

Also seeing as they will require the investment in other to buy a house in 5 years, they will need something that can be easily liquidated. Mutual funds are easy to liquidate from and so their investment here can be easily withdrawn when the time comes to allow them meet the house down payment.

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Which description of the parts of the compound interest expression is correct? P(1 + )nt P = principal; r = number of times inte
topjm [15]

Answer:

P = principal; r = annual interest rate; n = number of times interest is compounded per year; t = time in years

Explanation:

Given the formula P(1 + r)^nt,

P = principal; r = annual interest rate; n = number of times interest is compounded per year; t = time in years

Compound interest is defined as interest on a loan, deposit or investment that is calculated on the basis of the principal invested, deposited or borrowed and the accumulated interest from previous periods.

5 0
3 years ago
Which of the following is a guideline for designing forms and reports? Group of answer choices Design a complex navigation syste
lana [24]

Answer:

b. Balance the layout

Explanation:

The guideline for designing forms and reports involve using meaningful titles, including meaningful information, balancing the layout, designing an easy navigation system.

a. Design a complex navigation system False

The goal of designing forms and reports should include an easy navigation system not a complex one.

b. Balance the layout. True

Balancing the layout is a guideline for designing forms and reports which involves clearly labeling all data and entry fields.

c. Include as much additional information as possible to be comprehensive. False

This is not necessary especially if the additional information is not even meaningful. Only needed information should be displayed.

d. Use abbreviations in titles False

The use of meaningful titles is recommended.

e. Limit the forms or reports to 1000 rows False

This is false. It is recommended to use meaningful labels, formatting columns, rows, and text, and formatting numeric, textual, and alphanumeric data instead.

6 0
3 years ago
ou are valuing a company that is projected to generate a free cash flow of $10 million next year, growing at a stable 3.0% rate
mafiozo [28]

Answer:

Each share worth is $2.59

Explanation:

According to the given data we have the following:

D1 = Cash Flow at the end of year 1 = $ 10 million

r = Cost of Capital = 10% = 0.1

g = perpetual growth of cash flows

Hence, The present value of Cash Flows = D1/(r-g)

= 10/(0.1-0.03)

=10/0.07

= $ 142.8571428571 million

= $ 142.86 million

To find the equity value we need to remove the net debt from cash flows

Net Debt = Debt - Cash

= 22 - 8.5

= $ 13.5 million

Now net cash flows = Cash Flows - Net Debt

= 142.86 - 13.5

= $ 129.36 million

Therefore, each share worth = Present Value of Cash Flow / No of Outstanding Shares

= 129.36 / 50 (Both values are in millions so the zeros are ignored)

= 2.5872

= $2.59

Each share worth is $2.59

3 0
3 years ago
What is the present value of a 3-year annuity of $150 if the discount rate is 7%? (Do not round intermediate calculations. Round
BaLLatris [955]

Answer:

PV= $393.65

Explanation:

Giving the following information:

Cash flow= $150

Number of periods= 3 years

Interest rate= 7%

<u>To calculate the present value of the annuity, first, we need to determine the future value:</u>

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

A= annual cash flow

FV= {150*[(1.07^3) - 1]} / 0.07

FV= $482.24

<u>Now, the present value:</u>

PV= FV/(1+i)^n

PV= 482.24/1.07^3

PV= $393.65

3 0
4 years ago
George Kyparisis owns a company that manufactures sailboats. Actual demand for​ George's sailboats during each of the past four
devlian [24]

Answer:

budget sales per season

Seaon  Year 5

winter   1,473

spring   1,934

summer  2,267

fall              826

Explanation:

First, we calcualte the average per season:

Seaon Year 1 Year 2 Year 3 Year 4  Average per season

winter 1440 1240 1000  920.00   1,150.00

spring 1500 1440 1600  1,500.00  1,510.00

summer 1040 2140 2000   1900  1,770.00

fall          600 770            690   520  645.00

 

Now, we cross multiply to get the next year values

Seaon  Average per season  Year 5

winter  1,150.00   1,472.91  (1150/5075 x 6500)  

spring  1,510.00   1,933.99  

summer  1,770.00   2,267.00  

fall           645.00   826.11  

        5,075.00   6,500.00  

3 0
3 years ago
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