John Long has just learned he has won a $508,300 prize in the lottery. The lottery has given him two options for receiving the payments. (1) If John takes all the money today, the state and federal governments will deduct taxes at a rate of 46% immediately. (2) Alternatively, the lottery offers John a payout of 20 equal payments of $39,600 with the first payment occurring when John turns in the winning ticket. John will be taxed on each of these payments at a rate of 25%. Click here to view factor tables. Compute the present value of the cash flows for lump sum payout. (Round answer to 0 decimal places, e.g. 458,581.) Lump sum payout $ 233818 Assuming John can earn an 10% rate of return (compounded annually) on any money invested during this period, compute the present value of the cash flows for annuity payout. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)

John Long has just learned he has won a $508,300 prize in the lottery. The lottery has given him two options for receiving the payments. (1) If John takes all the money today, the state and federal governments will deduct taxes at a rate of 46% immediately. (2) Alternatively, the lottery offers John a payout of 20 equal payments of $39,600 with the first payment occurring when John turns in the winning ticket. John will be taxed on each of these payments at a rate of 25%. Click here to view factor tables. Compute the present value of the cash flows for lump sum payout. (Round answer to 0 decimal places, e.g. 458,581.) Lump sum payout $ 233818 Assuming John can earn an 10% rate of return (compounded annually) on any money invested during this period, compute the present value of the cash flows for annuity payout. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Marcus faces a progressive federal income tax structure that has the following marginal tax rates:0 percent on the first $10,000, 10 percent on the next $10,000, 15 percent on the next $10,000 , 25 percent bin the next $10,000 , and 50 percent on all additional income. In the additional , he must pay 5 percent of his income in provincial income tax and 15.3 percent on his Labour income in federal payroll taxes .Marcus earns $60,000 per year in salary and another $10,000 per year in nonlabour income.what is his average tax rate? a. 17.19 percent b. 46.69 percent c. 48.87 percent d. 56.01 percent
Morgan John has just learned he has won a $2,800,000 prize in the state lottery. He has two options for receiving the payments: (1) If Morgan takes all the money today, the state and federal governments will deduct taxes at a combined rate of 40% immediately. (2) Alternatively, the lottery offers Morgan a payout of 20 equal payments of $199,900 with the first payment occurring when Morgan turns in the winning ticket. Morgan will be taxed on each of these payments at a rate of 30%. Assuming Morgan can earn an 6% rate of return (compounded annually) on any money invested during this period. Hick here to view factor tables Compute the present value of the cash flows for the lump sum payout. Lump sum payout $ Compute the present value of the cash flows for the annuity payout. (Round factor values to 5 decimal places, eg. 1.25124 and final answer to O decimal places, eg. 458,581) Present value of annuity payout $ Which pay-out option should he choose? SUPE
A new home was sold for $400,000 in Hillsborough County. The buyer took out a mortgage for $300,000 and paid the rest in cash. The buyer agrees to pay for all three state transfer taxes (documentary stamp on the deed, promissory note, and the intangible tax on the new mortgage). How much will the buyer owe in state transfer taxes? $5,030 $2,800 $4.450 $4.150
Deja owns a photo printing business and wants to purchase a new state-of-the-art photo printer that she found online for $9,275, plus sales tax of 5.5%. The supply company is offering cash terms of 2/15, n/30, with a 1.5% service charge on late payments, or 90 days same as cash financing if Deja is approved for a company line of credit. If she is unable to pay within 90 days under the second option, she would have to pay 22.9% annual simple interest for the first 90 days, plus 2% simple interest per month on the unpaid balance after 90 days. Deja has an excellent credit rating but is unsure of what to do. a) If Deja took the cash option and was able to pay off the printer within the 15-day discount period, how much would she save? How much would she owe? b) If Deja takes the 90 days same as cash option and purchases the printer on December 30 to get a current-year tax deduction, using exact time, what is her deadline for paying no interest in a non-leap year? In a leap year?
Joe Taxpayer had state withholding of $30,000, dmv of $1000, property taxes of $6,000. What is the net state and local deduction? Part II: Joe calls and wants to know how much paying his second installment of property taxes of $5,000 will save him. Assume he is in the 30% marginal bracket.
John-Paul Ramin won $2.6 million in a state lottery. He was surprised to learn that he will not receive a check for $2.6 million. Rather, for twenty years, he will receive an annual check from the state for 1/20 of his winnings. The state finances this series of checks by buying John-Paul a payout annuity. Find what the state pays for John-Paul's payout annuity if the interest rate is 7.2%. (Round your answer to the nearest cent.)
Helen holds 1,000 shares of Fizbo Incorporated stock that she purchased 11 months ago. The stock has done very well and has appreciated $20/share since Helen bought the stock. When sold, the stock will be taxed at capital gains rates (the long-term rate is 15 percent and the short-term rate is the taxpayer's marginal tax rate). Ignore the time value of money. a. If Helen's marginal tax rate is 35 percent, how much would she save by holding the stock an additional month before selling? Tax savings b. What might prevent Helen from waiting to sell? Helen bears if she holds the stock for an additional month. The stock price could substantially if there is market volatility or if the company encounters financial difficulties. In addition, Helen may be selling the stock for which she may be unwilling to wait.
State whether each of the following payments is a tax. Explain your answers. To incorporate his business, Alex pays the state of Texas a $2,000 incorpora tion fee. The city paves a road and assesses each property owner on the road $4,000 for his or her share of the cost. The city of Asheville charges each residence in the city $10 per month to pick up the trash. Rory pays $450 of income tax to the state of California. Lanny is fined $45 for exceeding the speed limit.
Roberto borrowed $10,000 dollars from the mafia guy down the block Guido Colombo at a rate of 30% on January 1st 2020. So, in January 1st 2022 two years later, Roberto paid Guido $ 5,000 dollars from that loan. Guido feel some sympathy, he lowered the rate from 30% to 18% percent. How much money will Roberto owe Guido Colombo as of January 2024
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
A college student is reported in the newspaper as having won $10,000,000 in the Kansas State Lottery. However, as is often the custom with lotteries, she does not actually receive the entire $10 million now. Instead she will receive $500,000 at the end of the year for each of the next 20 years. If the annual interest rate is 6%, what is the present value (today’s amount) that she won? (Ignore taxes.)
Noor Patel has had a busy year! She decided to take a cross-country adventure. Along the way, she won a new car on The Price Is Right (valued at $14,600) and $500 on a scratch-off lottery ticket (the first time she ever played). She also signed up for a credit card to start the trip and was given a sign-up bonus of $100. How much from these will she have to include in her federal taxable income?

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