muhammed7877777

Tariff and non tariff barriers exist in all nations, eitherindependently or as part of a multicountry integrated economy.Present arguments that defend the use of trade barriers andarguments against the use of trade barriers. If theory and evidencesuggest we should follow a system of free trade, why do we havetrade barriers?

Discuss the arguments for and against the imposition of trade barriers.

Discuss ANY FIVE (5) arguments for and against the use of trade barriers by the government of South Africa.(Marks 15)

The return on the Rush Corporation in the state of recession isestimated to be -20% and the return on Rush in the state of boom isestimated to be 35%. The return on the Oberman Corporation in thestate of recession is estimated to be 40% and the return on Obermanin the state of boom is estimated to be -20%. Given thisinformation, what is the covariance between Rush and Oberman ifthere is a 0.70 probability that the economy will be in the stateof boom and a 0.30 probability that the economy will be in thestate of recession.

"University Service Company (USC) is a local firm set up to manage student-oriented apartment complexes in several college towns. It will remain in business one more year, and its cash flows over the coming year depend upon the total level of university enrollments in the markets USC serves. This is turn depends upon the state of the national economy. If the national economy expands rapidly over the next year, university enrollments will be high and USC will have high revenues; if the national economy is in recession, university enrollments will go down and USC’s revenues will be low. The estimated probability of an expansion is 50%, while the estimated probability of a recession is also 50%. If there is an expansion, USC will have total cash flow of $400,000 while in a recession total cash flow will be $200,000. USC has zero-coupon debt outstanding that will mature in one year with a promised payment of $250,000. Assume a one-period model and that there no corporate or personal taxes. Assume further that stockholders require a return of 8.0% and bondholders require a return of 5.0%." a. If there are no bankruptcy costs, what is the total value of the stock of USC? b. If there are no bankruptcy costs, what is the total value of the firm? c. If there are no bankruptcy costs, what is the promised return on the bonds? d. Now assume that, in the event of bankruptcy, legal and other costs will reduce the cash flow available to the firm’s investors by $50,000. What is the total value of the firm under these conditions?

Firms ABC and XYZ are identical, except that ABC is more levered. Both firms will remain in business for one more year. It appears that the probability of the continuation of expansion is 75% for the next year and the probability of recession is 25%. If the expansion continues both firms will generate an EBIT of $1 million. If a recession occurs, each firm will generate EBIT of $400’000. ABC’s debt obligation requires the firm to pay $350’000 at the end of the year. XYZ’s debt obligation require the firm to pay $500’000 at the end of the year. Neither firms pay taxes. Assume a discount rate of 15%. Instructions: a. What are the potential pay-offs in one year to ABC shareholders and bondholders ? What about those for XYZ’s ? (10 points)

Do banks usually have many variable costs? A specific type of business that tends to have relatively high fixed costs is the retail stock brokerage business. There are many brokerage firms in the U.S. including Charles Schwab and E*Trade. The retail stock brokerage business also tends to have relatively low variable costs. When there’s a lot of trading going on by investors in various securities, brokerage firms can do quite well. However, when trading slows down, that can be a very difficult time for brokerage firms.

(BUS350)

Describe the key functions of the brokerage business

Hello, can u describe the heart function 

Assume the interest rate on a savings account pays 7 percent annual interest.

1-If the interest is compounded annually, what is the future value of $1,000 invested in this account for 6 years?

2-If the interest is compounded monthly, what is the future value of $1,000 invested in this account for 6 years?

3-If the interest is compounded daily, what is the future value of $1,000 invested in this account for 6 years?

2. Would you rather have a savings account that pays 5% compounded semiannually or one that pays 5 percent compounded daily? Explain your answer.
3. Stillwater Hospital is borrowing $1,000,000 for its medical office building. The annual interest rate is 5%. What will be the monthly payments on the loan if the length of the loan is four years and payments occur at the end of each year? Show your work.

You want to borrow $10,000 from a local bank, which is to berepaid in 2 equal semiannual
installments. The loan officer initially offered an interest rateof 12% compounded monthly.
However, you were able to negotiate that interest be compoundedsemiannually instead of
monthly. With this negotiation, how much do you save in totalinterest payments over the loan
life?

Please do NOT use other peoples work on this site. they got this question wrong for me. Please explain all steps thanks

big brothers, inc. borrows $66,737 from the bank at 18.15 percent per year, compounded annually, to purchase new machinery. This loan is to be repaid in equal annual installments at the end of ech year over the next 8 years. How much will each annual payment be?

round nearst 2nd decimal

PV and FV functions in Excel

please do not answer if you are not 100% sure of the answer ! :) Also, PLEASE explain HOW you got your answer. I have to show my work in Excel so explain how I get my answer in excel. ANSWER BOTH QUESTIONS PLEASE :)

1)You need to have $10,000 to pay for your wedding in 5 years. How much do you need to deposit today in a bank that pays 4% interest, compounded annually, in order to achieve your goal?

2)You obtain an installment loan to pay for graduate school in the amount of $30,000. If the lender charges you 7% interest and you are required to pay the loan off in equal annual installments over a period of 8 years, what is the amount of each installment?

1) Rafeal is an analyst at a wealth management firm. One of his clients holds a $5000 portfolio that consist of four stocks. The investment allocation in the portfolio along with the contribustion of risk from each stock is given in the following table:

Rafeal calculated the portfolio’s beta as 0.820 and the portfolio’s expected return as 12.15%.

Rafeal thinks it will be a good idea to reallocate the funds in his client’s portfolio. He recommends replacing Atteric Inc’s share with the same amount in additional shares of Baque Co. The risk-free rate is 6%, and the market risk premium is 7.50%. According to Rafeal’s recommendation, assuming that the market is in equilibrium, how much will the portfolio’s required return change? 0.26, 0.30, 0.20, or 0.32 ?

Suppose, based on the earnings consensus of stock analysts, Rafeal expects a return of 10.39% from the portfolio with the new weights. Does he think that the revised portfolio, based on the changes he recommended is undervalued, overvalued or fairly valued? Suppose instead of replacing Atteric Inc’s Stock with Baque Co’s stock, Rafeal considers replacing Atteric Inc’s stock with the equal dollar allocation to shares of company X’s stock that has a higher beta than Atteric Inc. If everything else remains constant, the required return from the portfolio would (Increase or Decrease)

Rafeal is an analyst at a wealth management firm. One of his clients holds a $5000 portfolio that consist of four stocks. The investment allocation in the portfolio along with the contribustion of risk from each stock is given in the following table:

Rafeal calculated the portfolio’s beta as 0.820 and the portfolio’s expected return as 12.15%.

Rafeal thinks it will be a good idea to reallocate the funds in his client’s portfolio. He recommends replacing Atteric Inc’s share with the same amount in additional shares of Baque Co. The risk-free rate is 6%, and the market risk premium is 7.50%

According to Rafeal’s recommendation, assuming that the market is in equilibrium, how much will the portfolio’s required return change? 0.26, 0.30, 0.20, or 0.32 ?

Suppose, based on the earnings consensus of stock analysts, Rafeal expects a return of 10.39% from the portfolio with the new weights. Does he think that the revised portfolio, based on the changes he recommended is undervalued, overvalued or fairly valued?

Suppose instead of replacing Atteric Inc’s Stock with Baque Co’s stock, Rafeal considers replacing Atteric Inc’s stock with the equal dollar allocation to shares of company X’s stock that has a higher beta than Atteric Inc. If everything else remains constant, the required return from the portfolio would? Increase or Decrease ?

2).

Wilson holds a portfolio that invest equally in three stocks (W_A=W_B=W_C= 1/3). Each stock is described in the following table:

The risk-free [r_RF] is 4% and the market risk premium [RP_M] is 5%. Use the security market line (SML) to plot each stock’s beta and expected return on the graphy

A stock is in equilibrium if its expected return is ______ (is less than or is more than or equals ) its required return. In general, assume that markets and stocks are in equilibrium (or fairly valued), but sometimes investors have different opinions about a stock’s prospects and may think that a stock is out of equilibrium (either undervalued or overvalued). Based on the analyst;s expected return estimates, Stock A is _________ (undervalued or in equilibrium or overvalued)?, Stock B is ___________(undervalued or in equilibrium or overvalued)?, and stock C is in equilibrium and fairly valued.

?

2). Wilson holds a portfolio that invest equally in three stocks (WA=WB=WC= 1/3). Each stock is described in the following table: Stock Beta Standard deviation Expected return A 0.5 23% 7.5% B 1.0 38% 12.0% C 2.0 45% 14.0% The risk-free [rRF] is 4% and the market risk premium [RPM] is 5%. Use the security market line (SML) to plot each stock’s beta and expected return on the graphy A stock is in equilibrium if its expected return is ______ (is less than or is more than or equals ) its required return. In general, assume that markets and stocks are in equilibrium (or fairly valued), but sometimes investors have different opinions about a stock’s prospects and may think that a stock is out of equilibrium (either undervalued or overvalued). Based on the analyst;s expected return estimates, Stock A is _________ (undervalued or in equilibrium or overvalued)?, Stock B is ___________(undervalued or in equilibrium or overvalued)?, and stock C is in equilibrium and fairly valued.

You plan to invest in a portfolio fund. The fund’s total capital is $150 million, which is invested into stock FIB ($60 million) and stock ATM ($90 million). Stock FIB has a beta of 0.8 and stock ATM has a beta of 1.3. The following is probability distributions for the future possible returns of both stocks:

Probability Stock FIB Stock ATM

.3 2% -10%

.5 5% 16%

.2 14% 26%

Currently, the yield of treasury security is 2% and market risk premium is 4%.

a. Find the portfolio’s expected return

b. Find the portfolio’s beta and required return.

c. Identify whether the portfolio is undervalued, fair valued, or overvalued.

d. Explain market reaction and adjustment process in the market for this portfolio fund.

e. Draw the Security Market Line(SML), write the equation of the SML line, plot the portfolio’s required return and expected return, and indicate to which direction the expected return should move.

A bank can invest in 2 portfolios. Each requires $100 million to be raised either through debt or equity. One portfolio contains only safe assets and payts a certain gross return of 118 million. The other portfolio is risky and will pay a gross return of $200 million with probability 1/5 or a return of 75 million with probability 4/5.

a. Which portfolio makes the most sense from society's standpoint? Why?

b. If they can borrow the entire 100 million at 10% which portfolio would they choose and why?

c. Suppose they can borrow 90 million at 10% but must raise the other 10 million from equity. Which portfolio will they choose and why?

d. What if they must raise 20 million in equity and borrow only 80 million at 10%? which portfolion will be chose and why?

Explain how this problem illustrates the moral hazard associated with debt finance and what implications it has for bank regulation.

Filer Manufacturing has 4 million shares of common stock outstanding. The current share price is $70, and the book value per share is $5. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $60 million, has a 5 percent coupon, and sells for 95 percent of par. The second issue has a face value of $40 million, has a 6 percent coupon, and sells for 104 percent of par. The first issue matures in 20 years, the second in 4 years. The most recent dividend was $4.2 and the dividend growth rate is 4 percent. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 38 percent. What is the company's WACC?

Please show work

Filer Manufacturing has 8 million shares of common stock outstanding. The current share price is $87, and the book value per share is $6. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $75 million, has a 10 percent coupon, and sells for 97 percent of par. The second issue has a face value of $50 million, has a 11 percent coupon, and sells for 105 percent of par. The first issue matures in 25 years, the second in 7 years. The most recent dividend was $5.9 and the dividend growth rate is 7 percent. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 35 percent. What is the company's WACC?

Filer Manufacturing has 7.8 million shares of common stock outstanding. The current share price is $48, and the book value per share is $4. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $69.0 million and a coupon rate of 6.5 percent and sells for 108.8 percent of par. The second issue has a face value of $59.0 million and a coupon rate of 7.0 percent and sells for 107.9 percent of par. The first issue matures in 8 years, the second in 27 years. Suppose the company’s stock has a beta of 1.2. The risk-free rate is 2.6 percent, and the market risk premium is 6.5 percent. Assume that the overall cost of debt is the weighted average implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 35 percent. What is the company’s WACC

Filer Manufacturing has 7.6 million shares of common stock outstanding. The current share price is $46, and the book value per share is $3. The company also has two bond issues outstanding. The first bond issue has a face value of $68.6 million and a coupon rate of 6.3 percent and sells for 109 percent of par. The second issue has a face value of $58.6 million and a coupon rate of 6.8 percent and sells for 107.5 percent of par. The first issue matures in 7 years, the second in 28 years. Suppose the company’s stock has a beta of 1.3. The risk-free rate is 2.4 percent, and the market risk premium is 6.3 percent. Assume that the overall cost of debt is the weighted average implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 34 percent. What is the company’s WACC?

Quinton Johnston is evaluating NYL Manufacturing Company, Ltd. In 2017, when Johnston is performing his analysis, the company is unprofitable. Furthermore, NYL pays no dividends on its common shares. Johnston decides to value NYL Manufacturing by using his forecasts of FCFE. Johnston gathers the following facts and assumptions: ● The company has 17.0 billion shares outstanding. ● Sales will be R5.5 billion in 2018, increasing at 28 percent annually for the next four years (through 2022). ● Net income will be 32 percent of sales. ● Investment in fixed assets will be 35 percent of sales; investment in working capital will be 6 percent of sales; depreciation will be 9 percent of sales. ● 20 percent of the net investment in assets will be financed with debt. ● Interest expenses will be only 2 percent of sales. ● The tax rate will be 10 percent. NYL Manufacturing’s beta is 2.1; the risk-free government bond rate is 6.4 percent; the equity risk premium is 5.0 percent. ● At the end of 2022, Johnston projects NYL terminal stock value at 18 times earnings. What is the value of one ordinary share of NYL Manufacturing Company?

Mary and Harry Reser, 57 and 62, are looking ahead to retirement early next year. They are thinking about heading south to a cheaper and warmer state but haven't made a firm decision. Harry is the sole breadwinner and earns $64,543, plus an additional $8,169 from investments.

The Reser's two main concerns are longevity and taxes. "We want to take income from investments with the least amount of tax liability and make the money we have accrued last as long as we do," notes Harry. He also noted a concern about taking money out of tax-deferred plans in the correct manner to avoid IRS penalties.

The Reser's can be considered "millionaires next door," with an impressive net worth of $1,065,951. They have absolutely no debt and the following assets: $32,000 in a 2% bank passbook account, $347,365 in telephone stock; $224,901 in Harry's 401(k); $31,000 in an annuity; $202,685 in mutual funds; $23,000 in whole life insurance; their $190,000 home; and $15,000 of personal property.

No information was provided as to the type of mutual funds or the 401(k)'s asset allocation (i.e., the percentage of the account in different types of assets like stocks and bonds). Harry contributes 15% of his salary to the 401(k) and appears to have been doing this for many years. Neither spouse has an individual retirement account (IRA), however.

The Resers estimate that their monthly expenses total $1,500. The are concerned about the future cost of health care and note that, in retirement, "the biggest expense not in our current budget will be medical insurance." Currently, Harry shares part of the cost of health coverage with his employer but this coverage will end after he retires. His employer also provides short-term disability coverage and matches his 401(k) contribution up to the first 8% of pay.

The Reser's car and home have $500,000 and $300,000 of liability coverage, respectively. They do not own an umbrella liability policy. The Resers are thinking of tapping their $23,000 of life insurance cash value. "We do not feel that we need life insurance any longer," says Harry, "and will most likely cash them in."

Taxes were mentioned several times as a major concern. The Reser's taxable income is $50,543. If their adjusted gross income in retirement exceeds $44,000, 85% of their Social Security benefits will be taxed. Tax on Social Security is figured on what is known as "preliminary adjusted gross income." This figure includes all earnings, pensions, dividends and interest from investments, including tax-free municipal bonds, and half of a person's Social Security benefit.

The Resers do not have wills. They have no children and it is unclear who their heirs are.

1. Discuss the strengths and weaknesses of the Rese family's financial situation.

Their strength is their net worth of $1,065,951, their job contribute 8% of their 401k, they invest for the future and they have no debt.

Their weakness is that they can be penalize by the IRS, they have no kids so there’s no will and they have no future health insurance.

2. Comments about Reser family's cash flow.

4. Calculate the savings required to reach Reser family’s financial goals.

5. Recommend 3 to 5 action steps to improve Rese family's financial.

6. Recommended financial products such as bank accounts, insurance policies, and mutual funds for Rese’s family.

Mary and Harry Reser, 57 and 62, are looking ahead to retirement early next year. They are thinking about heading south to a cheaper and warmer state but haven't made a firm decision. Harry is the sole breadwinner and earns $64,543, plus an additional $8,169 from investments.

The Reser's two main concerns are longevity and taxes. "We want to take income from investments with the least amount of tax liability and make the money we have accrued last as long as we do," notes Harry. He also noted a concern about taking money out of tax-deferred plans in the correct manner to avoid IRS penalties.

The Reser's can be considered "millionaires next door," with an impressive net worth of $1,065,951. They have absolutely no debt and the following assets: $32,000 in a 2% bank passbook account, $347,365 in telephone stock; $224,901 in Harry's 401(k); $31,000 in an annuity; $202,685 in mutual funds; $23,000 in whole life insurance; their $190,000 home; and $15,000 of personal property.

No information was provided as to the type of mutual funds or the 401(k)'s asset allocation (i.e., the percentage of the account in different types of assets like stocks and bonds). Harry contributes 15% of his salary to the 401(k) and appears to have been doing this for many years. Neither spouse has an individual retirement account (IRA), however.

The Resers estimate that their monthly expenses total $1,500. The are concerned about the future cost of health care and note that, in retirement, "the biggest expense not in our current budget will be medical insurance." Currently, Harry shares part of the cost of health coverage with his employer but this coverage will end after he retires. His employer also provides short-term disability coverage and matches his 401(k) contribution up to the first 8% of pay.

The Reser's car and home have $500,000 and $300,000 of liability coverage, respectively. They do not own an umbrella liability policy. The Resers are thinking of tapping their $23,000 of life insurance cash value. "We do not feel that we need life insurance any longer," says Harry, "and will most likely cash them in."

Taxes were mentioned several times as a major concern. The Reser's taxable income is $50,543. If their adjusted gross income in retirement exceeds $44,000, 85% of their Social Security benefits will be taxed. Tax on Social Security is figured on what is known as "preliminary adjusted gross income." This figure includes all earnings, pensions, dividends and interest from investments, including tax-free municipal bonds, and half of a person's Social Security benefit.

The Resers do not have wills. They have no children and it is unclear who their heirs are.

1. Discuss the strengths and weaknesses of the Rese family's financial situation.

Their strength is their net worth of $1,065,951, their job contribute 8% of their 401k, they invest for the future and they have no debt.

Their weakness is that they can be penalize by the IRS, they have no kids so there’s no will and they have no future health insurance.

2. Comments about Reser family's cash flow.

4. Calculate the savings required to reach Reser family’s financial goals.

5. Recommend 3 to 5 action steps to improve Rese family's financial.

6. Recommended financial products such as bank accounts, insurance policies, and mutual funds for Rese’s family.

1) The amount of health insurance reimbursement actually paid may be reduced by [internal limits | co-payment caps]. Answer 2) Bob and Barbara Castle are each 39 years old and have sought your advice with regard to their financial affairs. Bob is a school administrator making $75,000 per year and Barbara is not employed outside of the home. The Castles' net worth is approximately $190,000. They have three kids, aged 6, 10, and 14. You have determined that the Castles currently have adequate life, health, auto, and homeowner's insurance. Which of the following forms of insurance is likely to fulfill their highest priority risk management need? Answer a. supplemental major medical insurance b. long-term care insurance c. disability income insurance d. additional life insurance e. critical illness insurance 3) Gabe is 58 years old and has been dependent on a cane for a couple of years. Gabe fears that he may need long-term care services some day in the future. His net worth is $400,000 and he receives $50,000 per year in a pension. He considers himself to be in excellent health and has never had a serious health scare like a heart attack, stroke, or cancer. He eats lots of bran and exercises regularly. Which of the following policies would you recommend to Gabe? Answer a. Gabe should buy a long-term care policy with a five-year limit, short elimination period without a COLA. b. Gabe should buy a long-term care policy with a long elimination period, lifetime benefits, and a COLA. c. Gabe needs a disability income policy. d. Gabe can qualify for Medicaid if and when he needs long-term care services. e. Gabe doesn't need disability insurance and probably can't qualify for long-term care insurance. 4) A comprehensive health insurance usually covers the cost of anesthetics and their administration. Answer True or False 5) Long-term health care [does | does not] have a deductible. 6) Premiums for Workers Compensation are paid by the [employees | employers]. 7) Which of the following best describes a custodial care facility? Answer a. custodial care is best provided in a hospital where surgical facilities are always available. b. a place that provides regular assistance with such activities as transferring someone from a bed to a chair, or helping them take a bath or get dressed. c. a place with licensed medical professionals that assist residents regularly with medically necessary care. d. a place that provides assistance in the normal activities of daily living but no medical attention or supervision. e. a place that provides regular assistance with chronic health conditions that are acute in nature. 8) Which of the following is not a desirable feature in a long-term care policy? Answer a. coverage for Alzheimer's disease b. duration of benefits of 6 years c. coverage for preexisting conditions d. inflation protection e. optional renewability clause 9) Supplementary Medical Insurance is a voluntary participatory program, commonly known as Medicare Part B. Answer True or False 10) Health Maintenance Organizations (HMOs) provide pre-paid health care to participants. Answer True or False

discuss Health Care Reform & Social Insurance. Social Insurance is Social Security, broken down into three parts: (1) Old Age Insurance (2) Survivors Insurance, and (3) Disability Insurance. Every working person contributes 7.65% of their paycheck (up to the 1^st $118,500) and their employer matches the same. A self-employed person will contribute 15.3% of their pay up to $118,500. Under the Affordable Health Care Act, more commonly known as Obama Care, passed in and became law in 2010, everybody must have health insurance either privately, through their employer or through a federal or state run health exchange. If you do not have insurance, you will pay a fine.

What are your general opinions of Social Security and the Affordable Care Act?

1. Apply What You’ve Learned - Planning for Health Care Expenses

Scenario: You are single and 35 years old. You are thinking of leaving your employer in January 2015 and becoming self-employed. However, replacing the insurance you currently receive through your employer is a big concern. You have saved a nice nest egg, but you know that the medical costs from one serious accident or the development of a serious medical condition could wipe out your savings. You estimate your net income will be $34,000 in your first year of self-employment. You are looking to enroll in health care through the health insurance marketplace. The estimated benchmark premium in your state for a 35-year-old is $3,000 per year. You are responsible for paying 7.50% of your income for health insurance. You are also considering purchasing disability insurance and long-term care insurance in case something happens in which you are no longer able to work or care for yourself.

Think about the Affordable Care Act (ACA) and answer the following questions:

1. If you choose to not enroll in a health insurance plan during 2015, your tax penalty under the Affordable Care Act (ACA) will be the greater of either $165, $325, $650, $975 or 2.0%, 1%, 1.5%, 2.5% of your gross income.

2. If you are subject to the tax penalty, it will be paid: (Pick One)

quarterly when the IRS sends you a bill

by monthly automatic withdrawals from your checking account

on your income tax return

3. The tax penalty applies to each year, month, or day that you do not have coverage for health insurance coverage for yourself or a member of your household. You are, however, allowed a maximum gap of six, three, one, or four months before becoming subject to the penalty tax.

4. Under the ACA and the new rules of the health insurance marketplace, the factors that may be used to determine your health insurance premium can include all of the following except: Check all that apply.

the current state of your health

any preexisting health conditions

the number of people in your family

your age

the state in which you live

5. For an insurance plan to meet the federal government’s standard of a qualified healthcare plan, it must provide ten essential benefits. Among these essential benefits are: Check all that apply.

Pediatric services, including dental and vision care

Laboratory services

Mental health and substance abuse services

Illegal drug coverage

Emergency services

Prescription drug coverage

6. The ACA provides for several different tiers of plans to be available through the various federal and state healthcare exchanges. At your age, you can select any one of the plans except for the bronze, platinum, silver, gold, or catastrphic plan, which covers 60%, 80%, 70%, 90% of the insured’s out-of-pocket medical costs.

7. As the plans’ tiers progress from bronze to silver to gold to platinum, (1) the percentage of out-of-pocket costs covered by each tier decreases or increases, and (2) the cost of the plans included in each of the tiers will decrease or incrase? .

8. You expecting to pay 6.00%, 7.00% , 7.50%, 8.00% of your income (pre-tax) for your health insurance if it is obtained through a federal or state healthcare exchange. The ACA allows for several types of tax credit subsidies, including income-based tax credits. One such credit can be based on a benchmark premium, which in your current situation, is worth $4,000, $3,000, $2,500, $3,500 and equal to the cost of the second-lowest-cost silver, most expensive bronze, second-lowest-cost platinum, most expensive gold plan in your geographic area.

9. Therefore, the amount of the tax credit is expected to be $450, $473, $900, $428, and means that you should expect to pay $473, $38, $900, $428 per month on an after-tax basis (rounded to the nearest whole dollar) for your health insurance coverage.

10. One possible solution to the lack of health insurance if you elect to leave your current job is to rely on COBRA coverage. Which of the following statements regarding COBRA and its provisions is true? Check all that apply.

You must exercise your COBRA rights within 90 days after you leave your former employment.

COBRA rules apply if your employer has more than 20 employees.

Under COBRA, you can remain a member of your group health plan for up to 18 months after you leave the job provided that other restrictions are met.

To receive healthcare benefits under your former employer’s plan, you must pay the entire premium (your and the employer’s portion) plus an administrative fee.

You make changes in your health insurance coverage either during the even months of the year (February, April, June, etc.), during the odd months of the year (January, March, May, etc.), during the open enrollment period or if you or your family experiences a defined important family event.

During the 2018 tax year, Gwen supports her family as a physicaltherapist. She reports $90,000 of earned income on her Schedule Cand paid the following insurance premiums:

• Family health insurance: $15,000
• Family dental insurance: $2,000
• Health insurance for her 24-year-old son who is not adependent: $3,000
• Long-term care insurance for her 49-year-old husband: $800

Use the following table for long-term care premiumlimitations.

What is Gwen's self-employed health insurance deduction for2018? $___________________

2018 AGI Phase-Out Ranges for Traditional and Roth IRAContributions to be used for this problem.

a. During 2018, George (a 24-year-old singletaxpayer) has a salary of $46,000, dividend income of $14,000, andinterest income of $3,000. In addition, he has rental income of$1,000. George is covered by a qualified retirement plan.

Calculate the maximum regular IRA deduction that George isallowed.
$____________

b. During 2018, Irene (a single taxpayer, underage 50) has a salary of $114,500 and dividend income of$10,000.

Calculate Irene's maximum contribution to a Roth IRA.
$____________

The following information applies to the questions displayed below.]

Hardaway earned $131,500 of compensation this year. He also paid (or had paid for him) $5,650 of health insurance (not through an exchange).\

What is Hardaway's AGI in each of the following situations (ignore the effects of Social Security and self-employment taxes)?

28.

Required information

a. Hardaway is an employee and his employer paid Hardaway’s $5,650 of health insurance for him as a nontaxable fringe benefit. Consequently, Hardaway received $125,850 of taxable compensation and $5,650 of nontaxable compensation.

b. Hardaway is a self-employed taxpayer, and he paid $5,650 of health insurance himself. He is not eligible to participate in an employer-sponsored plan.

Joe Roberts, 22 years old, is the star of the State University basketball team. He will likely be selected in the first round of the NBA draft. Needless to say, Joe is being wined and dined by several sports agents, and each has been providing Joe with “incentives” to select them as his agent. These incentives range from trips to Las Vegas to Rolex watches. This is all overwhelming for Joe, as he grew up on a farm in Kansas. His parents are also being wined and dined in hopes that Joe’s parents can influence him in his choice of agents. After finally selecting an agent, the time has come to negotiate with the basketball team that selected him. Joe relies completely on the agent in these dealings. Joe is just interested in playing ball, and he does not really care much about the financial details. Joe’s agent is in the final negotiating stages with the San Antonio Spurs. The potential offer is $3.5 million for the first year, a signing bonus, and incentive bonuses based on his and the team’s performance plus fringe benefits. These benefits will include health and dental insurance, life insurance, a team car, a clothing allowance, a travel allowance for him and his family, free tickets to each game, and all the training and fitness coaching he needs. A retirement plan is a separate benefit to be negotiated. Joe has come to your firm for tax guidance with regard to the package offered by the Spurs. Provide Joe with a tax analysis of the compensation package. Suggest any tax planning that could help Joe maximize his lifetime wealth.

Joe’s salary is $40,000 per year. His health insurance costs $6,000 of which $4,000 is paid by the employer and $2,000 is paid by Joe through salary reduction. Ignoring any other taxes and benefits, which of the following statements is true about the taxation of Joe’s income and health benefits?

a.The employer will be able to deduct Joe’s salary and $6,000 health insurance premium cost as a business expense.

b.Joe will owe tax on his $40,000 income, but not on the $6,000 health insurance benefit.

c.Joe will owe tax on $34,000 because the $6,000 insurance benefit is not taxable to him.

d.Joe’s taxable income will be reduced by the $2,000 he pays in health insurance premium and he will not owe any tax on the $4,000 paid by his employer.

Margaret Lykaios is the president and major shareholder of Measureup Ltd., a Canadian-controlled private corporation that operates a construction business in Regina, Saskatchewan. Measureup earns only business income which is all subject to the small business deduction.
 

In 2023, she had a number of financial transactions. She has asked you to help her prepare her 2023 tax return and provide advice on other tax matters. The following additional financial information is provided for 2023:
 

1. Margaret’s gross salary was $99,000, from which Measureup deducted the following amounts.

 
In addition to her salary, Measureup paid $2,000 to a deferred profit-sharing plan, $600 of private health insurance premiums, and $400 of group sickness and accident insurance premiums.
 

1. Margaret is required to use her own automobile for company business. For this, Measureup pays her an annual allowance of $4,000. She purchased a new automobile for $67,400 plus HST (13%), and received $18,000 as a trade on her old car. At the end of the previous year, the old car had an undepreciated capital cost balance of $16,000 (class 10.1). Of the 20,000 km driven in 2023, 13,000 km were for employment purposes. Margaret incurred automobile operating costs of $5,700.
2. For three months during the 2023, Margaret was sick and could not attend work. She received $9,900 from the company’s group sickness and accident insurance plan. Since the plan’s inception, Margaret had paid premiums totalling $2,000.
    
3. Margaret purchased a warehouse property and leased it to Measureup to store construction equipment. The property cost $272,000 (land - 30,000, building - 242,000). The building was originally constructed after March 18, 2007. The price for the land includes $2,200 of permanent landscaping completed just after acquisition. The 2023 rental income is summarized in the following chart.

1. Margaret is a 25% partner in a computer software business but is not active in its management. The partnership financial statement shows a profit of $40,000 for the year ended December 31, 2023. The profit consists of $32,000 from software sales and $8,000 from interest earned.
2. On July 1, 2022, Margaret purchased a three-year guaranteed investment certificate for $20,000 with interest at 9%. The interest compounds annually but is not payable until July 1, 2025.
3. Margaret received (made) the following additional receipts (disbursements).

Required:
Determine Margaret’s net income for tax purposes in accordance with the aggregating formula of Section 3 of the Income Tax Act for 2023. Assume other deductions total $8,000.
 

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