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lukranit [14]
3 years ago
9

Stan wants to start an IRA that will have $250,000 in it when he retires in 25 years. How much should he invest semiannually in

his IRA to do this if the interest is 6% compounded semiannually? Assume an Annuity Due. Round to the nearest cent.
Business
1 answer:
Wittaler [7]3 years ago
8 0
<span>25 years: No Payment, but total is 250000
6 months earlier. Payment of "P". It's value 1/2 year later is P(1+0.03)
6 months earlier. Payment of "P". It's value 1 year later is P(1+0.03)^2
6 months earlier. Payment of "P". It's value 1½ years later is P(1+0.03)^3
6 months earlier. Payment of "P". It's value 2 years later is P(1+0.03)^4

</span><span>We need to recognize these patterns. Similarly, we can identify the accumulated value of all 50 payments of "P". Starting from the last payment normally is most clear.
</span>
<span>P(1.03) + P(1.03)^2 + P(1.03)^3 + ... + P(1.03)^50
 That needs to make sense. After that, it's an algebra problem.
 P[(1.03) + (1.03)^2 + (1.03)^3 + ... + (1.03)^50]
</span>
P(<span><span>1.03−<span>1.03^51)/(</span></span><span>1−1.03) </span></span>= <span>250000</span>
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In 2019, Dan transferred 5-year property to Fleck Corp. in a tax-deferred Section 351 transaction. Fleck took Dan's adjusted bas
irina1246 [14]

Answer:

The property will be depreciated using the remaining 3 years of its life after the tax-free incorporation transfer year.  This is because Dan had already depreciated the property for 2 years before the transfer.

Explanation:

Sec. 351 allows a tax-free incorporation transfer if certain requirements are met, including that the property must be transferred to Fleck Corporation by Dan in exchange for stock in Fleck Corporation, and, immediately after the exchange, the Fleck Corporation is in control.

7 0
3 years ago
Ness, a broker, advises Ollie to invest in Penny Stock Inc. When the share price of Penny’s stock drops, Ollie accuses Ness of f
DerKrebs [107]

Answer: d. a misrepresentation of a fact knowing it is falso

Explanation:

Reliance that gives rise to liability for fraud requires intentional misrepresentation, that is a misrepresentation of a fact knowing that it is false. If Ness, the broker intentionally misled Ollie and advised Ollie to buy Penny stock shares based on Ness's  that the stock price will rise Ness will be charged with fraud.

5 0
3 years ago
On June 1, Year 1 Oxian Corp. receives $24,000 from a customer for work to be performed evenly over the next 2 years. What is th
pav-90 [236]

Answer:

$7,000 is the amount of revenue in year 1

Explanation:

The amount received from the customer is $24,000,which is payment for work to be performed over 24-month period i.e 2 years

In year 1,the work would be performed from June -December,hence  7-month worth of revenue should be recognized in year 1 as follows

revenue recognition in year=$24,000*7/24=$7,000

The amount of revenue attributable to year 1 on the income statement is $7,000

7 0
3 years ago
A pharmaceutical company announces that it has received Food &amp; Drug Administration (FDA) approval for a new allergy drug tha
Natali [406]

Answer:

b. The stock price will not change, because the market had already incorporated the information about the FDA approval announcement in the stock price.

Explanation:

If the markets are strong form efficient, it means the consensus of the market related to future impact of FDA approval on earnings would be correct, the stock price of today correctly estimates the future earnings, and therefore the stock price would not change when the earnings are released.

3 0
2 years ago
Which of the following is true about finding the present value of cash flows? Finding the present value of cash flows in future
Neko [114]

Answer:

The correct answer is A: %70,154

Explanation:

Giving the following information:

True: Finding the present value of cash flows in future years tells you how much you would need to invest today so that it would grow to equal the given future amount.

What is the value today of a $158,000 cash flow expected to be received 12 years from now based on an annual interest rate of 7%?

We need to use the following formula:

PV= FV/(1+i)^n

FV= final value

i= interest rate

n= number of years

PV= 158000/(1.07^12)= $70,154

3 0
3 years ago
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