Julie Andrews was severely injured after she fell into an open manhole in the city. She issuing the Department of Roadworks. Testimony was provided in the trial that Julie will beunable to work for five years. The jury is considering the damages that should beawarded to Julie and will include the following:(a) The present value of the last two years' pay. Julie Andrews' annual salary for the lasttwo years would have been $53,000 and $56,000, respectively.(b) The present value of five years' future salary. Julie Andrews' salary is assumed to be$59,000 per year.4(c) $180,000 for her injuries.(d) $25,000 for her legal costs.Assume that her salary is paid in equal amounts at the end of each month.The interest rate is an effective annual rate of 11 percent. What is the dollar value of thedamages payment to Julie Andrews? (Do not round intermediate calculations andround your answer to 2 decimal places, e.g., 32.16.)Award

A future cash flow fixed present value (PV) is an estimate of how much it is currently worth. When…

Answered: Julie Andrews was severely injured…

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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To improve her body shape Ms. Ganda decided to undergo procedure and sought the services of the Body Beautiful, a clinic operated outside the hospital and owned by Below Medical Center Group Company. Body Beautiful charged Ms. Ganda the amount of P224,000 (inclusive of 12% but exclusive of excise tax) for the service rendered. Ms. Ganda bought residential house for P4,000,000. He paid P1,000,000 down and mortgage back the property as security for the P3,000,000. REQUIRED:1) How much is the DST from the mortgage? 2) How much is the Excise tax?
Linda installed special pool for the hydrotherapeutic treatment of severe arthritis, as prescribed by her doctor. The cost of installing the pool was $20,000, and her insurance company paid $5,000 toward its cost. The pool increased the value of Linda's house by $7,000, and it has a useful life of 10 years. How much of a deduction (before any AGI limitations) is Linda entitled to in the year of installation of the pool?$
Nell, Nina, and Nora Potter, who are sisters, sell their principal residence (owned as tenants in common) in which they have lived for the past 25 years. The youngest of the sisters is age 60. The selling price is $960,000, selling expenses and legal fees are $63,000, and the adjusted basis is $120,000 (the fair market value of the residence when inherited from their parents 25 years ago; they made no capital improvements during the time they held the residence). The sisters plan to move into rental housing and not acquire another residence. Nell has contacted you on behalf of the Potters regarding the tax consequences of the sale.a. Write a letter to Nell advising her of the tax consequences and how taxes can be minimized. Nell’s address is 100 Oak Avenue, Billings, MT 59101.b. Prepare a memo discussing your approach to the situation for the tax files.
Bob Terwilliger received $18,351 for his services as financial consultant to the mayor's office of his hometown of Springfield. Bob says that his consulting work was his civic duty and that he should not receive any compensation. So, he has invested his paycheck into an account paying 4.22 percent annual interest and left the account in his will to the city of Springfield on the condition that the city could not collect any money from the account for 180 years. How much money will the city receive in 180 years from Bob's generosity?
Watson agreed to buy Ingram’s house for $355,000. The contract provided that Watson deposit $15,000 as earnest money and that “in the event of default by the Buyer, earnest money shall be forfeited to Seller as liquidated damages, unless Seller elects to seek actual damages or specific performance.” Because Watson did not timely comply with all of the terms of the contract, nine months after the Watson sale was to occur, Ingram sold the house to a third party for $355,000. Is Ingram entitled to Watson’s $15,000 earnest money as liquidated damages? Explain.
Energo Electronics, an incorporated business, has a highly paid electrical and computer specialist, Seng, on the payroll whose services are essential to the success of the business. The company is concerned that should Seng die or become disabled the business would suffer serious financial setbacks. In order to partially protect its interests, the company plans to purchase $500,000 worth of term insurance on Seng's life. Earning over $300,000 a year Seng's primary concern is to shelter as much of his income as possible from taxes. He has little personal need for life insurance. Suggest a solution using universal life insurance that would meet both Seng's and the company's needs. A) The company could buy a $500,000 UL policy on Seng's life with the level plus account value death benefit. The company would own the basic death benefit and Seng would own the cash value and the portion of the death benefit equal to the account value. The company would pay a premium equal to the policy NCPI…
Jagdeep sold his Indian restaurant “Maya no Dhaba” to Jasleen for the amount of $450,000. On top of that, Jasleen paid another $50,000 for Jagdeep to agreed that he won’t open a new Indian restaurant in the radius of 10 Kms for the next five years.Discuss whether the $50,000 payment is considered as Ordinary Income?
Igor owns a rental house and had to paint the living room, kitchen and bathroom after the most recent tenant moved out. The rooms had not been painted in the last five years and he worried he would not be able to rent it out to another tenant at the current fair market value if he didn’t repaint. The cost to repaint the three rooms was $1,500 ($1,000 labor and $500 paint). What amount, if any, can Igor deduct of this expense and on what form should it be listed?
Leon Martin is single and has never been married. Leon earned wages of $23,000 during the first half of the year. Leon lost his job in July and received a total of $9,000 in unemployment compensation. Leon is a barber and took a class at the community barber college to improve his barbering skills. He paid the cost of tuition and a course-related book. His qualified education expenses were $2,500. Leon also paid student loan interest for the courses he previously took to earn his Bachelor’s degree. For 2022, he paid student loan interest of $550. Leon does not have any dependents. Leon is a U.S. citizen with a valid Social Security number. 11. What is the taxable amount of Leon's unemployment compensation? A. $0 B. $4,500 C. $9,000 D. $10,200
11. Olabisi operates a lawn care service in southeastern Missouri. Olabisi incurs $63,000 of expenses determining the feasibility of expanding the business to southwestern Missouri. If Olabisi expands the business, the $63,000 is deductible in the current year. If Olabisi does not do so, then the $63,000 must be amortized over a 180-month period. True False
10. Seghen's car was destroyed by a tornado in a Federally declared disaster area in the current year. At the time of the accident, the car had a fair market value and an adjusted basis of $30,000. Seghen used the car 100% of the time for personal use. Seghen received an insurance recovery of 80% of the value of the car at the time of the accident. If Seghen's AGI for the year is $50,000, the deductible loss on the car would be: a.$10,500. b.$30,000. c.$900. d.$6,000. e.$40,000.
You are serving on a jury. A plaintiff is suing the city for injuries sustained after a freak street sweeper accident. In the trial, doctors testified that it will be five years before the plaintiff is able to return to work. The jury has already decided in favor of the plaintiff. You are the foreperson of the jury and propose that the jury give the plaintiff an award to cover the following: (a) The present value of two years’ back pay. The plaintiff’s annual salary for the last two years would have been $33,000 and $36,000, respectively. (b) The present value of five years’ future salary. You assume the salary will be $40,000 per year. (c) $100,000 for pain and suffering. (d) $12,000 for court costs. Assume that the salary payments are equal amounts paid at the end of each month. If the appropriate rate you choose is an EAR of 8 percent, what is the size of the settlement? size of settlement?

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