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VLD [36.1K]
3 years ago
6

A taxpayer, age 64, purchases an annuity from an insurance company for $82,000. She is to receive $683 per month for life. Her l

ife expectancy is 20.8 years from the annuity starting date. Assuming that she receives $8,200 this year, what is the exclusion percentage and how much is included in her gross income
Business
1 answer:
Vinil7 [7]3 years ago
8 0

Answer:

Exclusion Percentage = 48.10%

Included in income = $4256

Explanation:

The exclusion percentage can be calculated using the following formula:

=> Exclusion Percentage = Investment in Total /(Payments made * Life Expectancy *Total months in a year)

=> Exclusion Percentage = $82,000 / ($683* 20.8 *12)

=> Exclusion Percentage = 0.4810 = 48.10%  (Rounded off to two decimal places)

(Included in income):

The Included in income amount can be calculated using the following formula:

=> Included in Income = (Received amount - Return on Capital ) (Edited to accomodate changes)

& Return on Capital = ( Received amount * Exclusion percentage ) (Edited to accomodate changes)

=> ROC = $8200 * 0.481 = 3944.2 (Edited to accomodate changes)

=> Included in income = ( $8200 )- 3944.2 = 4255.80 => 4256 ( Rounded off to nearest dollar amount)

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Customers whose demand has a higher degree of price elasticity will pay less.

<h3>How Does Price Discrimination Occur and types of Price Discrimination?</h3>

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There are three types of price discrimination:

First-Degree Price Discrimination:  when a company charges the highest price per unit of consumption.

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2 years ago
Your portfolio consists of an index mutual fund which represents the overall market and Treasury bills. The mutual fund has a po
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Answer:

8.01%

Explanation:

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Expected return on mutual fund = 3% + 7.7%*1

Expected return on mutual fund = 10.70%

Best estimate of the portfolio expected rate of return = Weight of  mutual fund*Expected return on mutual fund + Weight of  risk-free Treasury bills*Expected return on risk-free  Treasury bills

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3 years ago
The standard rate of pay is $20 per direct labor hour. If the actual direct labor payroll was $117,600 for 6,000 direct labor ho
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Answer:

The variance is: $ 0.50 per direct labor hour.

Explanation:

Actual payroll = $117,000/6000h = $19.50 per hour

So, if we compare this value with the standard rate of pay ($20 per direct labor hour) The variance is: $20.00 - $ 19.50 = $0.50 per hour

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3 years ago
Suppose this monopolist can price discriminate across its customers and sets 2 prices in the market. Let P M represent the stand
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Answer:

hello your question is incomplete attached below is the missing part

answer: Pd = 1658 , Qd = 42

Explanation:

The monopolist will choose a discount price of ( Pd ) = 1658 and sell 42 units of the good in the discount market

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