Larry’s family of four has adjusted gross income of $100,000, placing it in the 25 percent marginal tax bracket, and medical expenses to date of $8,000. Barry’s family of four has adjusted gross income of $40,000, placing it in the 15 percent tax bracket, and medical expenses to date of $500. It is now December 1 and Larry and Barry are each considering having face lifts preformed by their plastic surgeons at a cost of $2,000. Medical expenses greater than 7.5 percent of adjusted gross income in one year are tax deductible. The after-tax cost to each of the surgery is
a. Larry, $1500; Barry, $1,700.
b. Larry, $2,000; Barry $1,700.
c. Larry, $1,500, Barry, $2,000.
d. Larry, $2,000, Barry, $2,000.
c. Larry, $1,500, Barry, $2,000.
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Chase Company's production budget is as follows: Budgeted sales in units 300,000 Desired units in inventory, December 31 70,000 370,000 Estimated units in inventory, January 1 50,000 Budgeted units of production 320,000 Each unit takes 30 minutes to produce and the standard labor rate is $18 per labor hour. What is Chase's direct labor budget?
a. $2,880,000 b. $2,700,000 c. $10,800,000 d. $5,760,000
Squire Inc.'s 5-year bonds yield 6.75%, and 5-year T-bonds yield 4.80%. The real risk-free rate is r* = 2.75%, the inflation premium for 5-year bonds is IP = 1.65%, the default risk premium for Squire's bonds is DRP = 1.20% versus zero for T-bonds, and the maturity risk premium for all bonds is found with the formula MRP = (t ? 1) × 0.1%, where t = number of years to maturity. What is the liquidity premium (LP) on Squire's bonds?
A. 0.49% B. 0.55% C. 0.61% D. 0.68% E. 0.75%
A company is contemplating investing in a new piece of manufacturing machinery. The amount to be invested is $100,000. The present value of the future cash flows at the company's desired rate of return is $105,000. The IRR on the project is 12%. Which of the following statements is true?
A) The project should not be accepted because the net present value is negative. B) The desired rate of return used to calculate the present value of the future cash flows is less than 12%. C) The desired rate of return used to calculate the present value of the future cash flows is more than 12%. D) The desired rate of return used to calculate the present value of the future cash flows is equal to 12%.
Clayton dies without a will. The distribution of Clayton's property, including his farm near Lincoln, Nebraska, is prescribed by
A. a court-appointed executor. B. federal probate statutes. C. state intestacy laws. D. Clayton's relatives.