Robert owns a $213,000 town house and still has an unpaid mortgage of $174,000. In addition to his mortgage, he has the following liabilities: Liabilities Visa 24 610 MasterCard 561 Discover card 429 Education loan 1,003 Personal bank loan 894 Auto loan 4,970 Total 2$ 8,467 Robert's net worth (not including his home) is about $21,600. This equity is in mutual funds, an automobile, a coin collection, furniture, and other personal property. (a) What is Robert's debt-to-equity ratio? (Round your answer to 2 decimal places.) Debt-to-equity ratio (b) Has he reached the upper limit of debt obligations? O Yes O No

Robert owns a $213,000 town house and still has an unpaid mortgage of $174,000. In addition to his mortgage, he has the following liabilities: Liabilities Visa 24 610 MasterCard 561 Discover card 429 Education loan 1,003 Personal bank loan 894 Auto loan 4,970 Total 2$ 8,467 Robert's net worth (not including his home) is about $21,600. This equity is in mutual funds, an automobile, a coin collection, furniture, and other personal property. (a) What is Robert's debt-to-equity ratio? (Round your answer to 2 decimal places.) Debt-to-equity ratio (b) Has he reached the upper limit of debt obligations? O Yes O No

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

See similar textbooks

Similar questions

Mitch and Bill are both age 75. When Mitch was 23 years old, he began depositing $1300 per year into a savings account. He made deposits for the first 10 years, at which point he was forced to stop making deposits. However, he left his money in the account, where it continued to earn interest for the next 42 years. Bill didn't start saving until he was 46 years old, but for the next 29 years he made annual deposits of $1300. Assume that both accounts earned an average annual return of 4% (compounded once a year). Complete parts (a) through (d) below. A) How much money does Mitch have in his account at age 75? B) How much money does Bill have in his account at age 75. C) Compare the amounts of money that Mitch and Bill deposit into their accounts. Mitch deposits _ in his accunt and Bill deposits _ in his account. D) Draw a onclusion about the parable. Choose the correct answer. -Bill ends up with more money in his account than Mitch because he makes more deposits than…
Janet and James purchased their personal residence 15 years ago for $412,500. For the current year, they have an $103,125 first mortgage on their home, on which they paid $5,156 in interest. They also have a home equity loan to pay for the children's college tuition secured by their home with a balance throughout the year of $144,250. They paid interest on the home equity loan of $14,425 for the year. Calculate the amount of their deduction for interest paid on qualified residence acquisition debt and qualified home equity debt for the current year. a. Qualified residence acquisition debt interest b. Qualified home equity debt interest
Your client is Lisa, aged 63. Lisa’s husband looked after all of the couple’s finances and Lisa is now struggling to know how best to manage the finances since her husband died earlier this year. Lisa has 3 children aged 23, 17 and 15. Her husband has left a superannuation balance amounting to $600 000 consisting of a $150 000 tax-free component. Lisa is a relatively low risk investor and thinks that the security of a regular income stream sounds very appealing. 1. What advice can you provide Lisa with respect to longevity risk? Given her circumstances how is she likely to be affected by longevity risk? Given life tables, for how many years on average is Lisa likely to require an income stream? 2. What are the implications if part of the husband’s death benefit superannuation is distributed to their children? 3. Lisa is concerned that she does not have the skills to manage the investment decisions associated with the $600,000 superannuation death benefit. Does this effectively rule out…
Janet and James purchased their personal residence 15 years ago for $262,500. For the current year, they have an $65,625 first mortgage on their home, on which they paid $3,281 in interest. They also have a home equity loan to pay for the children's college tuition secured by their home with a balance throughout the year of $121,750. They paid interest on the home equity loan of $12,175 for the year. Calculate the amount of their deduction for interest. paid on qualified residence acquisition debt and qualified home equity debt for the current year. It an amount is zero, enter "0". a. Qualified residence acquisition debt interest $ b. Qualified home equity debt interest. $
Bao and Mary Jane Lee have a yearly income of $93 comma 842 and own a house worth $127 comma 900, two cars worth a total of $ 28 comma 195 and furniture worth $14 comma 085. The house has a mortgage of $85 comma 677 and they have a car loan with an outstanding balance of $5 comma 822. Utility bills, totaling $181 for this month, have not been paid. Calculate their net worth, and explain what it means.
Pepa Madrigal has operated a very successful bakery for 30 years, and has accumulated investment that earn annual interest income of $40,000. Her other income put her in the top income tax bracket for personal tax purposes. She has a son, Antonio who is 22 years old and currently has no income. Antonio's only personal tax credit is the personal tax credit. Determine the amount of federal income taxes that could be saved by transferring the interest earning investments to a trust with Antonio as the income beneficiary, assuming that the trust will be required to distribute all of its income each year.
Wrett purchases a new four-wheeler with a loan from his bank. The bank requires that he use his car, which is paid off, as collateral for the loan he secured from the bank. The value of the 4-wheeler is $2500.00. The value of the car is $15,000.00. Wrett defaults on his loan for the 4-wheeler and thus is forced to sell his car to repay the loan. Which statement below is true regarding this secured transaction? Multiple Choice Since the value of the car far exceeds the value of the 4-wheeler, the bank must accept an alternate good closer to value of the 4-wheeler. Wrett must dispose of his car and apply the proceeds to the loan and if there is any surplus the money belongs to Wrett. The bank will sell the car for the value of the loan of the 4-wheeler, not the actual fair market value of the car. Wrett must hand over physical possession and title to the car. In a workout, creditors are usually paid in all of the following ways except, Multiple Choice Bankruptcy…
74 01:14:02 eBook For tax purposes, a dwelling unit is a residence if the taxpayer's number of personal-use days of the unit is more than 10 days. True or False True False
Marty has weekly gross earnings of $684.20. He is married filing jointly. He lives in Tennessee, which has no State Withholding Tax. He also makes a credit union deposit of $20.00 into savings every check. Find Marty’s weekly net earnings for this pay period.
Mm. 138.
Larry purchased an annuity from an insurance company that promises to pay him $9,000 per month for the rest of his life. Larry paid $946,080 for the annuity. Larry is in good health, and he is 72 years old. Larry received the first annuity payment of $9,000 this month. Use the expected number of payments in Exhibit 5-1 for this problem. a. How much of the first payment should Larry include in gross income? b. If Larry lives more than 15 years after purchasing the annuity, how much of each additional payment should he include in gross income? c. What are the tax consequences if Larry dies just after he receives the 100th payment?
The Federal Deposit Insurance Corporation insures deposits up to $250,000 per person per financial institution. Suzanne has $518,000 in a joint account with her husband, Ted. How much is not covered by FDIC insurance?

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS