Reference no: EM131081467
Kanu has a $515,000 inside a deferred variable annuity. He put $500,000 into the annuity and the remaining $15,000 is growth. He started the annuity exactly one year and one day ago. The sub account for the annuity is 100% invested in stocks. Kanu is 65.
a. If Kanu withdraws $1,000 will any of it be taxed? How much and at what rates (ie Ordinary Income Rate, Short Term Capital Gain Rate, etc…)?
b. If Kanu withdraws $20,000 will any of it be taxed? How much and at what rates (ie Ordinary Income Rate, Short Term Capital Gain Rate, etc…)?
c. If Kanu withdraws all of his money will any of it be taxed? How much and at what rates (ie Ordinary Income Rate, Short Term Capital Gain Rate, etc…)?
d. If Kanu withdraws all of his money after 1 year does he have anything to worry about other than taxes?
|
Change in market value of the firm after the exchange
: You own all the equity of ABC Co. The company currently has no debt. The company’s annual cash flow is $700,000 before interest and taxes. The corporate tax rate is 35%. You have the option to exchange 1/3of your equity position for 4% coupon bonds w..
|
|
Determine your net return after taxes and inflation
: You purchased 1000 shares of stock in Cumberland Software for $3 per share on January 1, 2006. Over the next four years you received 7 cents per share annually in dividends. On December 31, 2009 you sell all your shares of Cumberland Software for $16..
|
|
What will the interest charges be if she elects the plans
: The price of a new car is $24,000. Assume that an individual makes a down payment of 25% toward the purchase of the car and secures financing for the balance at the rate of 6%/year compounded monthly. What monthly payment will she be required to make..
|
|
Spot rate on treasury bill-determine the expected yield
: Given the spot rate on a 90 day(3 month) treasury bill is 1.5% and the spot rate on a 180 day (6 month) treasury bill is 2.5%, determine the expected yield on a 90 day(3 month) treasury bill three months from now.
|
|
Deferred variable annuity
: Kanu has a $515,000 inside a deferred variable annuity. He put $500,000 into the annuity and the remaining $15,000 is growth. He started the annuity exactly one year and one day ago. The sub account for the annuity is 100% invested in stocks. Kanu is..
|
|
Depreciation on the equipment to produce the new board
: Rolston Music Company is considering the sale of a new sound board used in recording studios. The new board would sell for $27,100, and the company expects to sell 1,560 per year. The company currently sells 2,060 units of its existing model per year..
|
|
Find size of monthly payments he will be required to make
: Joe secured a loan of $14,000 five years ago from a bank for use toward his college expenses. The bank charges interest at the rate of 3%/year compounded monthly on his loan. Now that he has graduated from college, Joe wishes to repay the loan by amo..
|
|
What is their equity after
: The Taylors have purchased a $310,000 house. They made an initial down payment of $30,000 and secured a mortgage with interest charged at the rate of 9%/year on the unpaid balance. Interest computations are made at the end of each month. If the loan ..
|
|
Stream of cash flows-cash flow at the end of the first year
: stream of cash flows. Cash flow at the end of the first year will be $9,000, and cash flows in future years are expected to grow indefinitely at an annual rate of 4%. If the discount rate for this project is 10%, what is the project NPV?
|