After-tax return on bill corporate bonds

Assignment Help Business Management
Reference no: EM131061951

Bill Smith, a manager of a restaurant/bar in Los Angeles, is in the 25% marginal tax bracket and pays an additional 5% in taxes to the state of California. Bill has $20,000 invested in corporate bonds which is currently earning an average annual return of 7.5%.

Additionally, Bill also has another $20,000 invested in municipal bonds from the city of Los Angeles that are being used to redevelop depressed areas downtown. These bonds pay an average return of 5.4%.

Assume that in both cases, Bill earns the same returns as calculated on both the corporate and municipal bonds each year for the next 15 years.

Answer the following:

  • What is the after-tax return on Bill's corporate bonds for the current year?
  • What is the after-tax return on his municipal bonds for the current year?
  • Which investment earns more returns: corporate or municipal bonds?
  • What would the balance in each account be at the end of the fifteenth year?

Reference no: EM131061951

Questions Cloud

Determine the corresponding value of the tension in the cord : End A of a slender, uniform rod of length L and weight W bears on a surface as shown, while end B is supported by a cord BC. Knowing that the coefficients of friction are µs = 0.40 and µk = 0.30,
Calculation for the probability : Include in your post a calculation for the probability of one of the risks identified by your company. This information may not be available in the annual report, therefore you will likely need to conduct research and critical thinking to complet..
Development and application of sustainable operations : Fuji Xerox is a leader in the development and application of sustainable operations. A key aspect of the company''s leadership is in its ground-breaking development of remanufacturing. Before 1993, broken or damaged parts from Fuji Xerox equipment..
Cash flow statement for a company : What happens to the cash flow statement for a company operating on a calendar year when a sale is made in December but the firm isn't paid until the following January?
After-tax return on bill corporate bonds : What is the after-tax return on Bill's corporate bonds for the current year? What is the after-tax return on his municipal bonds for the current year?
Consolidated view of all records : In case a market participant, which is trading at several organised market places, wants to have a consolidated view of all records of transactions, including orders to trade, how can this be achieved other than reporting through one single RRM?
A shopper that enjoys shopping for clothing : 1. What is the probability a shopper likes to shop for clothing? The probability of a shopper that enjoys shopping for clothing is 0.72. 360 out of 500 people responded positively when asked if they enjoy this (Brightman, 1986, p. 33).
Determine the smallest possible value of the coefficient : determine the smallest possible value of the coefficient of static friction. (Assume that the sash is slightly smaller than the frame and will bind only at points A and B
Determine the smallest allowable value of the coefficient : A 500-N concrete block is to be lifted by the pair of tongs shown. Determine the smallest allowable value of the coefficient of static friction between the block and the tongs at F and G.

Reviews

Write a Review

Business Management Questions & Answers

  An advantage to the career field

Discuss at least two ways that this multicultural mix can be an advantage to the career field you have chosen.

  Explain description of fmla

Explain what are some specific inadequacies of the Family Medical Leave Act and what are your recommendations to improve the effectiveness of this piece of legislation?

  Develop a business plan for the organization

Review the quarterly report and develop a business plan for the organization for its upcoming financial year. Be sure to include the following in your organized business plan

  Do you think the reasons for rules and tradition

Do you think the reasons for rules and tradition for communication at your workplace apply to academic writing.

  Amortization schedule for rode company

The collectibility of the lease payments is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred by the lessor. The lessee assumes responsibility for all executory costs. a) Prepare a lease amor..

  Examine how job design work processes and performance

examine how job design work processes and performance expectations affect individual job satisfaction and successful

  Question 1 all of the subsequent are physical resources

question 1 all of the subsequent are physical resources exceptbullraw materialsbulla robotic welderbulllabour used in

  How morals and ethics are formed

One's upbringing creates the basis for what is significant and should be valued. The morals and ethics of the family and community are instilled during one's upbringing.

  Barry is studying truancy rates among middle school

Case Study: IRB Process As part of his graduate applied research project, Barry is studying truancy rates among middle school students in an inner-city neighborhood with a history of gang violence.

  Write the paper in the form of a memo to management

Develop skills not only in performing the calculations behind financial analysis but interpreting the numbers as well - calculate and interpret the results. The purpose is not for you to find calculations and interpretations that have been done by s..

  Ability to mobilize the motivation

A person's belief about his or her ability to mobilize the motivation, cognitive resources, and courses of action necessary to execute a specific action within a given context.

  What is the outline of the fundamental purposes

What is the outline of the fundamental purposes of an organization?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd