Question

Suppose the preceding 8 percent return is taxable rather than tax-deferred and the taxes are paid...

  1. Suppose the preceding 8 percent return is taxable rather than tax-deferred and the taxes are paid annually. What will be the after-tax value of her $12,000 investment after 5, 10, and 20 years? Do not round intermediate calculations. Round your answers to the nearest dollar.

    in 5 years: $  

    in 10 years: $  

    in 20 years: $  

Homework Answers

Answer #1

Answer is as follows:

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Someone in the 36 percent tax bracket can earn 8 percent annually on her investments in...
Someone in the 36 percent tax bracket can earn 8 percent annually on her investments in a tax-exempt IRA account. What will be the value of a one-time $12,000 investment in 5 years? 10 years? 20 years? You may use Appendix C to answer the questions. Do not round intermediate calculations. Round your answers to the nearest dollar. in 5 years $: in 10 years $: in 20 years $:
At the end of the preceding year, World Industries had a deferred tax asset of $12,000,000,...
At the end of the preceding year, World Industries had a deferred tax asset of $12,000,000, attributable to its only temporary difference of $48,000,000 for estimated expenses. At the end of the current year, the temporary difference is $43,000,000. At the beginning of the year there was no valuation account for the deferred tax asset. At year-end, World Industries now estimates that it is more likely than not that one-third of the deferred tax asset will never be realized. Taxable...
XYZ Corporation has a deferred compensation plan under which it allows certain employees to defer up...
XYZ Corporation has a deferred compensation plan under which it allows certain employees to defer up to 40 percent of their salary for five years. For purposes of this problem, ignore payroll taxes in your computations. (Use Table 1.) (Round your intermediate calculations and final answers to the nearest whole dollar amount.) a. Assume XYZ has a marginal tax rate of 21 percent for the foreseeable future and earns an after-tax rate of return of 13 percent on its assets....
Suppose you bought a bond with a coupon rate of 7.2 percent paid annually one year...
Suppose you bought a bond with a coupon rate of 7.2 percent paid annually one year ago for $945. The bond sells for $990 today. a. Assuming a $1,000 face value, what was your total dollar return on this investment over the past year? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Total dollar return $ b. What was your total nominal rate of return on this investment over the past year?...
Suppose you bought a bond with a coupon rate of 4.2 percent paid annually one year...
Suppose you bought a bond with a coupon rate of 4.2 percent paid annually one year ago for $900. The bond sells for $950 today. a. Assuming a $1,000 face value, what was your total dollar return on this investment over the past year? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)   Total dollar return $    b. What was your total nominal rate of return on this investment over the past year?...
Kate is in the 15% tax bracket and has $29,000 available for investment during her current...
Kate is in the 15% tax bracket and has $29,000 available for investment during her current tax year. Assume that she remains in the same tax bracket over the next 11 years, and determine the accumulated amount of her investment after taxes if she puts the $29,000 into the following. (Round your answers to the nearest cent.) (a) a tax-deferred annuity that pays 4%/year, tax deferred for 11 years (b) a taxable instrument that pays 4%/year for 11 years Hint:...
Irene is saving for a new car she hopes to purchase either four or six years...
Irene is saving for a new car she hopes to purchase either four or six years from now. Irene invests $31,000 in a growth stock that does not pay dividends and expects a 6 percent annual before-tax return (the investment is tax deferred). When she cashes in the investment after either four or six years, she expects the applicable marginal tax rate on long-term capital gains to be 25 percent. (For all requirements, do not round intermediate calculations. Round your...
Required informatio Tawana owns and operates a sole proprietorship and has a 37 percent marginal tax...
Required informatio Tawana owns and operates a sole proprietorship and has a 37 percent marginal tax rate. She provides her son, Jonathon, $9,500 a year for college expenses. Jonathon works as a pizza delivery person every fall and has a marginal tax rate of 15 percent. a. What could Tawana do to reduce her family tax burden? b. How much pretax income does it currently take Tawana to generate the $9,500 (after taxes) given to Jonathon? (Round your answer to...
Suppose the average return on Asset A is 6.8 percent and the standard deviation is 8...
Suppose the average return on Asset A is 6.8 percent and the standard deviation is 8 percent, and the average return and standard deviation on Asset B are 3.9 percent and 3.3 percent, respectively. Further assume that the returns are normally distributed. Use the NORMDIST function in Excel® to answer the following questions. a. What is the probability that in any given year, the return on Asset A will be greater than 10 percent? Less than 0 percent? (Do not...
4. (a) Studebaker is eligible to put 12,000 before-tax dollars each year into a tax-deferred annuity...
4. (a) Studebaker is eligible to put 12,000 before-tax dollars each year into a tax-deferred annuity (TDA). In order to invest in a TDA, however, he must have his salary reduced, and the case indicates that he can afford a reduction in his spendable income of $3,052 each year without disrupting his lifestyle. One investment option is to encrease the amount placed into a TDA each year to the legal maximum of $12,000 and move funds from the money market...