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xeze [42]
3 years ago
6

Every worker sees a social security (fica) tax taken out of his or her paycheck. the nominal tax rate on workers is 7.65 percent

. but there's a catch: only wages below a legislated ceiling are taxable. in 2014, the table wage ceiling was $117,000. what percentage of income is paid in social security taxes by a worker in 2014 earning
Business
1 answer:
denpristay [2]3 years ago
8 0
Part A:

Because, there is a ceiling on the amount of earnings that is taxable. Any earning below the ceiling will be taxed at 7.65% of the earning while any earning above the eiling will be taxed at 7.65% of the ceiling.

Given that the ceiling on the amount that is taxable is $117,000. If a worker earns $40,000, then the worker's FICA tax will be 7.65% of $40,000 = 0.0765 x $40,000 = $3,060

Therefore, the percentage of income that is paid in social security taxes by a worker in 2014 earning $40,000 is 7.65%



Part B:

Because, there is a ceiling on the amount of earnings that is taxable. Any earning below the ceiling will be taxed at 7.65% of the earning while any earning above the eiling will be taxed at 7.65% of the ceiling.

Given that the ceiling on the amount that is taxable is $117,000. If a worker earns $80,000, then the worker's FICA tax will be 7.65% of $80,000 = 0.0765 x $80,000 = $6,120

Therefore, the <span>percentage of income that is paid in social security taxes by a worker in 2014 earning</span> $80,000 is 7.65%


Part C:

Because, there is a ceiling on the amount of earnings that is taxable. Any earning below the ceiling will be taxed at 7.65% of the earning while any earning above the eiling will be taxed at 7.65% of the ceiling.

Given that the ceiling on the amount that is taxable is $117,000. If a worker earns $200,000, then the worker's FICA tax will be 7.65% of $117,000 = 0.0765 x $117,000 = $8,950.50

Therefore, the percentage of income that is paid in social security taxes by a worker in 2014 earning $200,000 is given by

\frac{8950.5}{200000} \times100\%=4.48\%
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Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 –$ 343,000 –$ 50,000 1 52,000 24,700
AURORKA [14]

Answer:

The payback period for each of the project is - project A = 3.33 and project B = 2.13

Explanation:

First of all the payback period means the amount of time it would take for  a company to recover its initial cost or investment which it has invested in the project .

<u>Calculating the payback period for project A</u>

Year   Cash flow      Cumulative    Discounting     Present    Discounted

                                 cash flow        factor              value        cumulative flow

( NOTE - Formula used for discounting factor = 1 / (1 + i)^n, where i = 16% which is the rate of return on the investment and n is the number of years.)

0   -$343,000       -$343,000          1                  -$343,000         -$343,000

1     $52,000         -$291,000          .86206         $44,828           -$298,172

2    $72,000          -$219,000         .74314            $53,508         -$244,665

3    $72,000          -$147,000         .64063            $46,127         -$198,537

4    $447,000         $300,000        .55226           $2,46,874        $48,337

Now we will in which year the cash flow was last negative and then in that we will add ( cumulative cash flow of the year it was last negative / cash flow of the next period ).

= 3 + $147,000 / $447,000

= 3.33 ( payback period for project A )

<u>Calculating the payback period for project B</u>

Year   Cash flow      Cumulative    Discounting     Present    Discounted                                                              

                                   cash flow       factor              value         cash flow

0        -$50,000         -$50,000         1                   -$50,000    -$50,000

1          $24,700          -$25,300         .86206        $21,293       -$28,707

2         $22,700          -$2600            .74314          $16,869      - $11,838

3         $20,200          $17,600           . 64063        $12,941        $1013

4         $15,300           $32,900          .55226         $8,450        $9463

Now we will in which year the cash flow was last negative and then in that we will add ( cumulative cash flow of the year it was last negative / cash flow of the next period ).

= 2 + 2600 / 20,200

= 2.13 ( payback period for project B)

3 0
3 years ago
The​ risk-free rate is 3.4​% and you believe that the​ S&amp;P 500's excess return will be 11.9​% over the next year. If you inv
VashaNatasha [74]

Answer:

So since our Risk was "1.2 times" to the Risk of Market Hence Out Expected Return would also be 1.2 times.

Explanation:

Before Answering the Question , let us Understand some Important terms in simple language :

Market Excess Reture : it is basically that how much Market Return will be "Over & Above" Riskfree Rate

Beta : it shows that How much times is Risk of Our Stock in Comparison to that of Market . So We would be Expecting "that much times" Excess Return from that of "Market Excess Return"

?Now in Our Question it is Given that

Expected Excess Market Return (Rm - Rf) over next year = 11.9%

Beta of pur Stock = 1.2

\therefore Our Expected Excess Return over next year = Beta * Expected Excess Market Return

= 1.2 * 11.9%

= 14.28 %

5 0
2 years ago
Robert Company purchased $100,000 of 8 percent bonds of Evergreen Corp. on January 1, 20x1, at $92,278. The bonds mature January
Annette [7]

On January 1st, 20x1, Robert Company paid $92,278 for $100,000 of Evergreen Corp.'s 8% bonds that were available for sale. 12% is the market yield. Interest is paid on April 30 and October 31 of each year. Bush is a company with a calendar year. The right response is $4,556,500.

On December 31x1, Fox should declare $4,556,500.

Bonds are currently valued $4,580,000.

$50,000 Bonds are currently valued $4,530,000.

From July 1 to December 31, the discount is amortised over a six-month period: Bonds are currently valued $4,580,000.

$50,000 Bonds are currently valued $4,530,000.

From July 1 to December 31, the discount is amortised over a six-month period: Interest Income = $226.00 ($4,530,00% x 10% x 6/12)

In terms of interest-bearing quantities, $5,000,000 times 8% times six months is $200,000.

Interest revenue less interest due is equal to discounted interest.

Discount amortised is calculated as $226500 less $200000, or $2650.

As a result, $4,530,000 + $26,500 is the total that Fox must declare as of December 31, 2020, multiplied by one.

Thus, On December 31x1, Fox should declare $4,556,500.

Visit for more information on payment

brainly.com/question/14293241

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5 0
1 year ago
When policymakers set prices by legal decree, they obscure the signals that normally guide the allocation of society's resources
r-ruslan [8.4K]

True- prices are supposed to be controlled by the changing equilibrium of supply and demand and when the government sets a price it may increase or decrease demand or supply in a way that would not naturally take place.

3 0
3 years ago
Murray Motor Company wants you to calculate its cost of common stock. During the next 12 months, the company expects to pay divi
Vlad1618 [11]

Answer:

a. Compute the cost of retained earnings (Ke)

$60 = $3 / (Ke - 8%)

Ke - 8% = $3 / $60 = 5%

Ke = 13%

b. If a $5 flotation cost is involved, compute the cost of new common stock (Kn).

$60 (1 - $5/$60) = $3 / (Kn - 8%)

$55 = $3 / (Kn - 8%)

Kn - 8% = $3 / $55 = 5.45%

Kn = 13.45%

Flotation costs reduce the amount of money that the company receives for every new stock that it issues, therefore, it increases the cost of new stocks.

6 0
3 years ago
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