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3 years ago

When a qualified plan starts making payments to its recipient, which portion of the distributions is taxable?

1 answer:

4 0

When a qualified plan starts making payments to its recipient the gains are taxable. Gains are the profit/return that are made from an investment. A gain can be something you make from a sale or or inheritance. Gains are typically taxed in a higher tax bracket as well.

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You are making a $120,000 investment and feel that a 10 percent rate of return is reasonable given the nature of the risks invol

Vika [28.1K]

Net Present Value is the difference between the present value of cash flows and the initial investment.

Net Present Value = Present Value of cash flows - Initial Investment

The following image shows the Net Present value of the cash flows:

Net Present Value = $122,142 - $120,000

Net Present Value = $2,142

5 0

3 years ago

Effect of transactions on cash flows

kirill115 [55]

Solution :

EFFECT AMOUNT ($)

a. Cash payment $510,000

b. Cash receipt $600,000

c. Cash receipt $72,400

d. Cash payment $825,000

e. Cash payment $30,000

f. Cash receipt $390,000

g. Cash payment $225,000

h. Cash payment $1475000

8 0

3 years ago

Slow 'n Steady, Inc., has a stock price of $ 34, will pay a dividend next year of $ 3.10, and has expected dividend growth o

erica [24]

Answer:

10.92%

Explanation:

The formula and the computation of the estimated cost of equity capital is shown below:

Stock price = Next year dividend ÷ (cost of equity - expected dividend growth rate)

We assume the cost of equity be X

$34 = $3.10 ÷ (cost of equity - 1.8%)

$34 X - $34 × 1.8X = $3.10

After solving this,

The cost of equity would be 10.92%

3 0

3 years ago

Commerce Corporation has a high probability of operating at 40,000 activity hours during the upcoming period, and lower probabil

Zepler [3.9K]

Answer:

Total cost= $877,500

Explanation:

<u> First, we need to calculate the unitary variable cost:</u>

Unitary variable cost= 135,000 / 30,000= $4.5

Unitary variable cost= 180,000 / 40,000= $4.5

Unitary variable cost= 225,000 / 50,000= $4.5

<u>Now, the total cost for 35,000 hours:</u>

Total cost= Unitary variable cost*total number of hours + fixed costs

Total cost= 4.5*35,000 + 720,000

Total cost= $877,500

4 0

3 years ago

In mid-October, Lambert expects to buy a new computer for $4,500 using the company credit card. Typically, the credit card bill

vfiekz [6]

Answer:

$6,000

Explanation:

Since it is stated in the question that "Typically, the credit card bill is paid in full in the following month", it implies that cash will be disbursed in October for purchases of goods made in September, while cash will be disbursed in November for purchases of goods made in October.

Based on this, Lambert's expected cash disbursement in October for purchases of goods made in September is $6,000, while his expected cash disbursement in November for purchases of goods (a new computer) made in October is $4,500.

8 0

3 years ago