Jacoby purchased a home in 2017 for $1,500,000 by making a $150,000 down payment and by borrowing the remaining $1,350,000 with a loan secured by the home. He made interest-only payments for 2017, 2018, and 2019. In 2019, Jacoby can deduct interest expense on $1,100,000 of the loan principal.
Answer the following statement true (T) or false (F)
False
The maximum amount of debt on which a taxpayer may deduct home mortgage interest is limited to $1,000,000 of acquisition indebtedness for debt incurred before 12/16/2017.
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When you want to express a negative thought, always use two negative words such as not or never
A) True B) False
Modigliani and Miller (M&M) Proposition II states:
A) the cost of equity does not change when a firm takes on a greater proportion of debt. B) the cost of equity increases when a firm takes on a greater proportion of debt. C) the cost of debt increases when a firm takes on a greater proportion of equity. D) the cost of equity decreases when a firm takes on a greater proportion of debt.
Paragas, Inc., is considering the purchase of a machine that would cost $370,000 and would last for 8 years. At the end of 8 years, the machine would have a salvage value of $52,000. The machine would reduce labor and other costs by $96,000 per year. Additional working capital of $4,000 would be needed immediately. All of this working capital would be recovered at the end of the life of the machine. The company requires a minimum pretax return of 19% on all investment projects. (Ignore income taxes.)See separate Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using the tables provided.The net present value of the proposed project is closest to:
A. $22,532 B. $78,530 C. $19,528 D. $9,584
An experiment consists of throwing two six-sided dice and observing the number of spots on the upper faces. Determine the probability that
a. the sum of the spots is 3. b. each die shows four or more spots. c. the sum of the spots is not 3. d. neither a one nor a six appear on each die. e. a pair of sixes appear. f. the sum of the spots is 7.