Answer:
Betty's AGI = $28,934
Complete Page 1 of Form 1040 for Betty is attached.
Explanation:
<u>Adjusted gross income:</u>
Adjusted gross income (AGI) is an income measurement for the purpose of calculation of tax payable.
AGI is calculated by deducting allowable deduction from taxable income.
<u>Notes for the working attached:</u>
- The salaries and expenses are deductible as business expenses.
- Depreciation and real estate taxes are deducted as rental/royalty-related deductions.
- Interest income is included in the adjusted gross income.
- Alimony expenses are deductible from the adjusted gross income.
- The revenue from apartment building is assumed as interest income and NOT the total income.
- The real estate and charitable contributions are itemized deductions.
Those decisions should be based on COSTS AND BENEFITS.
In making decision on which course to follow, the decision made will be based on the costs of the products involved and the benefits that each one of them has to offer. The product with the lowest cost and the highest benefits should be chosen.
Answer:
12.5%
Explanation:
A portfolio has $2,800 invested in stock A
$3,900 is invested in stock B
The expected return of stock A is 9%
= 9/100
= 0.09
The expected return of stock B is 15%
= 15/100
= 0.15
The first step is to calculate the total value
= $2,800+$3,900
= $6,700
Therefore, the expected return on the portfolio can be calculated as follows
= (2,800/6,700)×0.09 + (3,900/6,700)×0.15
= 0.4179×0.09 + 0.5820×0.15
= 0.03761 + 0.0873
= 0.1249×100
= 12.5%
Hence the expected return on the portfolio is 12.5%
