years. | | The step-by-step calculation is: P | = | S(1 + rt)-1 | | | = | 400,000(1 + 0.0892 x 0.24657534...)-1 | | | = | 400,000 x 0.97847883... | | | = | $391,391.53 | Rounded as last step | b)You are correct. When the first bill matures at time 90 days, the investor purchases a second bill. We must find the purchase price of the second bill. This can be displayed on a time line: | | | | | $P | $400,000 | | | | | | 0 | 90 | 180 | 270 | | | | | | | | | P | = | price | = | unknown | | S | = | Maturity value | = | $400,000 | | r | = | Simple interest rate (decimal) | = | 9.16 | 100 | | = | 0.0916 | | t | = | Time period (years) | = | 90 | 365 | | = | 0.24657534... years.
2.0 points) Compound interest. While simple interest only pays interest on the amount that was originally invested, compound interest pays interest on the amount invested plus any interest earned. 4. If you were opening a savings account with compound interest, would you prefer an account that offers annual compounding, quarterly compounding, or daily compounding? Why?
e) Now assume that the practice contracts with one HMO, and the plan proposes a 20% discount from charges. Redo questions a, b, c, and d under these conditions. a) Construct the group's base case projected P & L statement. | Number of procedures | Rate per procedure | Amount | Revenue | 7500 | $100 | $750,000 | Variable cost | 7500 | $25 | $187,500 | Contribution Margin | $562,500 | Less: Fixed Cost | | | $500,000 | Net Income | | | $62,500 | b) What is the group's contribution margin? What is it's breakeven point?
How? Response: Issue: Different tax consequences between paying down the mortgage (debt) and assuming a new mortgage (debt) for Federal income tax purposes Applicable Law: IRC code section 56(b) Conclusion: The only discernible difference is the amount of interest that can be deducted, and without further details I cannot provide you a more definitive answer as to which route is better. To the question of what are the tax consequences of selling a house the Smiths are allowed to deduct a total of $500,000 received from gain every two years on the sale of a primary residence. It is better to take a new mortgage only in case where the new one offers a rate of interest which is lower than the old one. Otherwise, there is not much sense in
Annual interest on the debentures will accrue at a floating 5% premium over the prime rate. The right to receive interest payments will be cumulative; that is each debenture holder is entitled to past and current interest payments before DLK’s board can declare a common stock dividend. The debentures would be both nontransferable and noncallable. Lacey, Kaylee and Doug have asked you, their tax accountant, to advise them on the tax implications of the proposed financing agreement. After researching the issue, issue your advice in a tax research memo.
All taxable income will be taxed assuming a 35% tax rate. III. OPERATING RESULTS Net Operating Income $200,000 Annual loan payments (principal & interest) $120,000 Tax deductable items: Interest payment component of loan payment $ 95,000 Cost recovery expense $ 30,000 USING THE FORMATS BELOW, CALCULATE THE SPECIFIED ITEMS. 1. Total Partnership Cash Distributions: NET INCOME $ ________ - Loan Payment - ________ BEFORE TAX CASH FLOW $ - 12% preferred return to investing partners - ________ REMAINING CASH AVAILABLE FOR DISTRIBUTION $ - 50% to Limited Partners -
2.0 points) Compound interest. While simple interest only pays interest on the amount that was originally invested, compound interest pays interest on the amount invested plus any interest earned. 4. If you were opening a savings account with compound interest, would you prefer an account that offers annual compounding, quarterly compounding, or daily compounding? Why?
The company pays cash upon conversion, and the delivers shares based on a conversion price from that day is calculated on a proportionate basis each day of trading in the relevant conversion period. (b) How can small no-name company issue debt at 2.5% when Coca Cola has to pay 4.25%? A small company can issues loans that rank below other debts, such as convertible senior subordinate notes. If the issuer happens to go bankrupt and looses its assets, then as a subordinate debt the convertible subordinate note will be repaid after other debt securities have been paid. As with all debt securities, however, the note will be repaid before stock.
This is a 30-percent sales tax. Or, "I spent a dollar, 77¢ for the product and 23¢ in tax." This rate, when programmed into a point-of-purchase terminal, is 30 percent. Note that no matter which way it is quoted, the amount of tax is the same. Under an income tax rate of 23 percent, you have to earn $130 to spend $100.
It uses Public money unnecessarily and is unfair to taxpayers. It makes financial reform going forward much more difficult. Protecting the markets for derivative products like CDOs and CDSs allows for a repeat of the risky practices that got us into the current crisis. And finally, by guaranteeing the corporate existence of large banks, we are maintaining their power and priorities and thus are not likely to see gains on predatory lending, foreclosure abuse, and other areas where reform is sorely needed. If we want to help the people who are suffering in this crisis and recession, then we should make financial policies with them directly in mind.