What is the maximum amount of tax deduction

Assignment Help Financial Management
Reference no: EM131495710

XYZ corporation, a very small business, sponsors a 401 k plan to which XYZ's employees made elective deferrals of $15,000 in the year 2017. XYZ's total payroll for all employees covered under the in the year of 2017 was $100,000. The company provides no matching contribution at this time. What is the maximum amount of tax deduction that could be taken by XYZ corporation for contributions made to employee accounts in the year 2017?

a)15,000

b)18,000

c)25,000

d)54,000

Reference no: EM131495710

Questions Cloud

Bullish on telecom stock : You are bullish on Telecom stock. What will be your rate of return if the price of Telecom stock goes down by 8% during the next year?
Participants account in defined contribution plan : The annual additions to a participants account in a defined contribution plan are composed of which of the following?
What would be the most appropriate retirement plan : what would be the most appropriate retirement plan for Ellen to establish?
Defined- contribution plans with contribution formulas : Which of the following statements concerning defined- contribution plans with contribution formulas that are integrated with Social Security is correct?
What is the maximum amount of tax deduction : What is the maximum amount of tax deduction that could be taken by XYZ corporation for contributions made to employee accounts in the year 2017?
What is pats personal tax treatment due to his transaction : has had $50,000 allocated to his account in the qualified plan. What is Pat's personal tax treatment due to his transaction?
What is the net unrealized appreciation portion received by : What is the net unrealized appreciation portion received by Mary at the time of distribution of employer stock?
Describe a characteristic of defined benefit plan : Which one of the following statements does not correctly describe a characteristic of a defined benefit plan?
According to poisson process at mean rate of five per hour : If Jim treats customer as finite calling population with number of customer 25 and each customer arrives according to Poisson process at mean rate of 5 per hour

Reviews

Write a Review

Financial Management Questions & Answers

  Value of the firm be if the company takes on debt equal

Letang Corporation expects an EBIT of $24,000 every year forever. The company currently has no debt, and its cost of equity is 14.5 percent. The company can borrow at 9 percent and the corporate tax rate is 38. What is the current value of the compan..

  Compute the amount of each of the end of year payments

Compute the amount of each of the end-of-year payments.- Prepare a loan amortization schedule detailing the amount of principal and interest in each year's payment.

  How much interest expenses did ferris save

In the practice rounds Ferris sold 400(000) units of it High End production capacity, 600(000) units of its Traditional production capacity, and 400(000) units of its Low End capacity generating $15,220(000) in positive cash flow. how much interest e..

  Two machines are being considered for manufacturing process

Two machines are being considered for a manufacturing process. Machine A has a first cost of $75, 200, and its salvage value at the end of six years of estimated service life is $21,000. The operating costs of this machine are estimated to be $6, 800..

  What must the debt- equity ratio of the firm

A firm desires a WACC of 8.4 percent. Its cost of equity is 11.2 percent and its pre-tax cost of debt is 7.1 percent. The firm does not issue preferred stock. The tax rate is 38 percent. What must the debt- equity ratio of the firm be if it is to ach..

  Find an article or application of type of installment loan

Critique the use of bank debit cards. Bank debit cards are becoming a popular alternative to using checks or credit cards. Investigate the advantages and disadvantages of using a bank debit card and answer the questions below. An installment loan is ..

  What is the aftertax cost of the company debt

Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the table below. Bond Coupon Rate Price Quote Maturity Face Value 1 8.70 % 105.2 7 years $ 22,000,000 2 7.00 95.2 10 years 42,000,000 3..

  What kind of deal did the running back scamper off with

In 2015, a running back signed a contract worth $58.8 million. The contract called for $10 million immediately and a salary of $3 million in 2015, $8.5 million in 2016, $10 million in 2017, $8.9 million in 2018 and 2019, and $9.5 million in 2020. wha..

  Equivalent annual savings

Gluon Inc. is considering the purchase of a new high pressure glueball. It can purchase the glueball for $100,000 and sell its old low-pressure glueball, which is fully depreciated, for $18,000. The new equipment has a 10-year useful life and will sa..

  The profitability index decision rule

The Matterhorn Corporation is trying to choose between the following two mutually exclusive design projects: Year Cash Flow (I) Cash Flow (II) 0 –$89,000 –$57,000 1 38,900 11,100 2 49,000 36,500 3 29,000 30,500. If the required return is 12 percent, ..

  Compute the realized rate of return for an investor

Seven years ago the Singleton Company issued 27-year bonds with a 11% annual coupon rate at their $1,000 par value. The bonds had a 5% call premium, with 5 years of call protection. Today Singleton called the bonds. Compute the realized rate of retur..

  What is the equipments after-tax net salvage value

Allen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost $14 million, of which 80% has been depreciated. The used equipment can be sold today for $4.9 million, and its tax rate is 40%. What is the equipment'..

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