Comparing Roth IRA’s to Roth 401 (k)’s A Roth IRA account is an individual’s personal retirement account that allows them to set aside after tax income up to a specified amount per year. The earning on the account as well as the withdrawals after age 59 ½ are tax free. The Roth 401 (k) combines the features of a traditional 401 (k) with features of a Roth IRA. Both of these retirement plans allows for the individual to contribute to the account without any up front tax deductions. As long as the account was held for more than five years withdraws are not subject to income tax after the normal retirement age.
Capital Budgeting Case Study Name QRB 501 Date Instructor Name Capital Budgeting Study Case The purpose of this study is to understand Capital Budgeting and expenditures in Banking and how it is used. The intent is to answer questions such as the 5-year projected income statement, projected cash flow, Net Present Value (NPV), Internal Rate of Return (IRR) and which company to recommend acquiring based on the information given. We will look into these analysis to get a better understanding. 5 Year Projections Corporation B had higher expenses, depreciation and discount rate that corporation A. The tax rate was the same for both companies over a 5 year period.
(0.5 points) $500 c. Has Jessie Robinson ever applied for bankruptcy? (0.5 points) No d. How many creditors have made inquiries about Jessie Robinson's credit? (0.5 points) 3 creditors e. Do you think Jessie Robinson usually pays bills on time and in full? (1-2 sentences. 1.0 points) Yes and Yes.
State one advantage and one disadvantage of this course of action. (5 marks) • Using the ‘Saving and Borrowing Calculator’ (on the DVD-ROM or online), calculate the monthly repayments required and the total amount of interest paid if Panna used a loan from the store’s finance company, at an APR of 9 per cent, to fully fund the purchase over both (a) one year, and (b) three years. What factors would Panna need to consider in deciding between the one-year or three-year payment period? (8 marks) • What would be the advantages and disadvantages of using each of the three forms of debt available to Panna to purchase the furniture? (12 marks) (Total: 25 marks) Question 2 Adan (26) and Jane (25)
ANALYSIS: The leasing arrangement is considered a sale-leaseback transaction because “it involve[s] the sale of property by the owner and the lease of the property back to the seller (FAS 28, 1976, ¶2). The lease agreement is classified as an operating lease because it does involve a transfer of ownership, a bargain purchase option, a term of greater than 75% of the turbine’s useful life, or minimum lease payments that exceed 90% of the equipment’s fair value (1976, ¶7). Power Station would simply record a credit to cash and a debit to lease expense for the payment amount each of the 5 years in the lease term. Power Station’s may benefit from entering into the sale-leaseback transaction because the turbines would
Assume that the mortgage will start in December, 2002. The mortgage company is offering you a 6% rate on a 30-year mortgage with no points. If you pay 1.25 points, they are willing to offer you the mortgage at 5.875%. If you pay 2 points, they are willing to offer you the mortgage at 5.75%. a.
Explain Problem 2: Sale-Leaseback Sangamon signs a sale-leaseback with a buyer, Bismark. Under the terms of the contract, Bismark will pay $146,874 in cash to Sangamon for equipment and then immediately lease it back to Sangamon. The equipment originally cost $100,000 and had a carrying value of $80,000 on Sangamon’s books immediately prior to the transaction. In 5 years, the residual value of the leased equipment is estimated to be $20,000 when the lease terminates. The lease contract obligates Sangamon to make five equal annual payments of $30,000 to Bismark that begin immediately after the sale.
Purchase Costs | Leasing Costs | Down payment $1,500 | Security deposit $500 | Loan payment $450 for 48 months | Lease payment $450 for 36 months | Estimated value atEnd of loan $4,000 | End of lease charges $600 | Opportunity cost interest rate: 4 percent | Purchasing vehicle: $1,500 + [$450 x 48mths ] - $4,000 + [$1,500 x 0.4% x 4yrs] = $19,340 Leasing vehicle is: [$450 x 36mths] + $600 + [$500 x 0.4% x 3yrs] = $16,860 3. You can purchase a service contract for all of your major appliances for $180 a year. If the appliances are expected to last for 10 years, and you earn 5 percent on your savings, what would be the future value of the amount you would pay for the service contract? $293.22 4. You estimate that you can save $3,800 by selling your own home rather than using a real estate agent.
B—Uncollected Medicare tax on tips. Include this tax on Form 1040. See “Other Taxes” in the Form 1040 instructions. C—Taxable cost of group-term life insurance over $50,000 (included in boxes 1, 3 (up to social security wage base), and 5) D—Elective deferrals to a section 401(k) cash or deferred arrangement. Also includes deferrals under a SIMPLE retirement account that is part of a section 401(k) arrangement.
*Find out whether you qualify for the income-based repayment program. Under this program, your loan payments could be reduced, based on the amount of discretionary income you have available. In most cases, your loan payments won't exceed 10% of your total income. After 25 years, anything you still owe on the loan will be forgiven. To apply for the program, you'll need to contact the company that's servicing your student loan.