- This chapter stressed the importance of evaluating potential investments. Now it’s your turn to try your skill at evaluating a potential investment in the Walmart Corporation. Assume you could
- Using a financial calculator or time value of money tables in the Chapter Appendix, calculate the following.1. The future value of $450 six years from now at 7 percent.2. The future value of $900
- Jamie Lee Jackson, age 24, is graduating with her business administration degree in the next year. She has been attending college full time while working part time in the bakery department of a local
- Using the tax rate schedule in Exhibit 4-6, determine the amount of taxes for the following taxable incomes:1. Married filing jointly: Taxable income $50,000.2. Married filing jointly: Taxable income
- Using the tax table in Exhibit 4-6, determine the amount of taxes for the following situations:1. A head of household with taxable income of $70,751.2. A single person with taxable income of
- Kristy Nguyen is trying to decide between two different stock investments, and she asks for your help. Information about each investment is below.1. Calculate the dividend yield for each company.2.
- Using Personal Financial Planner Sheet 38, calculate the approximate yearly operating cost of the following vehicle.Annual depreciation, $2,500 Annual mileage, 13,200 Current year’s loan
- What would be the monthly payment for a $180,000, 20-year mortgage at 6 percent?
- Betty and John Martinez own 180 shares of McDonald’s common stock.McDonald’s annual dividend is $5.16 per share. What is the total of dividends the Martinez couple will receive for this year?
- Although many investing websites provide historical data for dividends, stock prices, and stock splits that you can access with a simple click of your mouse, one site that is especially easy to use
- Last year, Shanna Young purchased 100 shares of Iowa Farm Implement. During the last 12 months, she received dividends totaling $1.20 a share. During the 12-month period, the company earned $4.00 a
- The board of directors of Herbalife Nutrition approved a 2-for-1 stock split. After the split, how many shares of Herbalife stock will an investor have if he owned 210 shares before the split?
- Four years ago, David Robertson purchased 200 shares of Harrison Microchips. At the time, each share of Harrison Microchips was selling for $40. He also paid a $22 commission when the shares were
- James Hayes owns 215 shares of Ohio Utility preferred stock. If this preferred stock issue pays $1.60 per share each year, what is the total dollar amount Mr. Hayes will receive in one year?
- Assume you own shares in Walmart and that the company currently earns $6.93 per share and pays annual dividend payments that total $2.16 a share each year. Calculate the dividend payout for Walmart.
- Nancy Cardoza invested $4,200 in ExxonMobil stock because her research indicated the stock should average a 6 percent return for investors over the next four years. If ExxonMobil investors do earn 6
- Carl Patterson likes investing in stocks that pay dividends. Carl owns 118 shares of a local utility company. The stock pays a regular annual dividend in the amount of $3.10 per share, and the
- Two years ago, you purchased 100 shares of General Mills Corporation. Your purchase price was $52 a share, plus a total commission of $8 to purchase the stock. During the last two years, you have
- As a stockholder of Bozo Oil Company, you receive its annual report. In the financial statements, the firm has reported assets of $21 million, liabilities of $12 million, after-tax earnings of $2
- Northwestern Electronics has a 1.40 beta. If the overall stock market increases by 8 percent, how much will the stock for Northwestern Electronics change?
- According to the financial statements for Samson Electronics, Inc., the firm has total assets valued at $310 million. It also has total liabilities of $190 million. Company records indicate that the
- For four years, Mary Thomas invested $4,000 each year in America Bank stock. The stock was selling for $52 in 2018, for $48 in 2019, for $49 in 2020, and for $41 in 2021.1. What is Mary’s total
- Bill Campbell invested $4,000 and borrowed $4,000 to purchase shares in Kellogg. At the time of his investment, Kellogg stock was selling for $58 a share. Note: There were no commissions to buy or
- After researching Best Buy common stock, Sally Jackson is convinced the stock is overpriced. She contacts her account executive and arranges to sell short 200 shares of Best Buy. At the time of the
- Charlie Nelson is 50 years old and wants to diversify her investment portfolio and must decide if she should invest in tax-free municipal bonds or corporate bonds.The tax-free bonds are highly rated
- Calculating Interest. Calculate the annual interest and the semiannual interest payment for the following corporate bond issues with a face value of $1,000. Table Summary: The cells in the body of
- Analyzing Convertible Bonds. Jackson Metals, Inc., issued a $1,000 convertible corporate bond. Each bond is convertible to 32 shares of the firm’s common stock.1. What price must the common stock
- For investors who want to buy U.S. Treasury securities, the Treasury Direct website is a treasure trove of information. Detailed information about Treasury bills, notes, bonds, Treasury Inflation
- James Gomez purchased ten $1,000 corporate bonds issued by Kohl’s. The annual interest rate for the bonds is 4.00 percent.1. What is the annual interest amount for each Kohl’s bond?2. If the
- Determining the Approximate Value for a Bond. To solve the problem below, use the present value of a bond calculator at https://www.thecalculator.co/finance/Bond-Price-Calculator-606.html. Table
- Back in 2018, Betty Wallace, a 47-year-old single mother, got a telephone call from a Wall Street account executive who said that other clients had given him her name. Then he told her his brokerage
- Matt Redburn has decided to invest $1,000 and purchase 52-week T-bills with some excess cash he doesn’t need for the next year. He knows that T-bills are discounted securities, but he is confused
- Jean Miller purchased a $1,000 corporate bond for $880. The bond paid 3 percent annual interest. Three years later, she sold the bond for $960.Calculate the total return for Ms. Miller’s bond
- Mark Crane purchased a $1,000 corporate bond five years ago for $1,060. The bond paid 2.5 percent annual interest. Five years later, he sold the bond for $950. Calculate the total return for Mr.
- Sandra Waterman purchased a 52-week, $1,000 T-bill issued by the U.S.Treasury. The purchase price was $984.1. What is the amount of the discount?2. What is the amount Ms. Waterman will receive when
- James McCulloch purchased a 30-year U.S. Treasury bond four years ago for $1,000. The bond paid 2.1 percent annual interest. Four years later he sold the bond for $1,040.1. What is the annual
- Calculate the purchase price for a 52-week, $1,000 Treasury bill with a stated interest rate of 1.10 percent.
- Assume you are in the 35 percent tax bracket and purchase a 2.8 percent, tax-exempt municipal bond. Use the formula presented in this chapter to calculate the taxable equivalent yield for this
- Assume you are in the 32 percent tax bracket and purchase a 3.15 percent, tax-exempt municipal bond. Use the formula presented in this chapter to calculate the taxable equivalent yield for this
- What is the current price for a $1,000 bond that has a price quote of 108?
- Given the following information, calculate the net asset value for the Boston Equity mutual fund. Total assets $870 million $4 million Total liabilities Total number of shares 42 million
- Assume Northern Electronic Manufacturing has operating income before interest and taxes of $925 million. It also has interest expense of $124 million. Calculate the times interest earned ratio for
- Assume that 10 years ago you purchased a $1,000 bond for $920. The bond pays 3.1 percent interest and will mature this year.1. Calculate the current yield on your bond investment at the time of the
- Three years ago, Dorothy Schwartz’s mutual fund portfolio was worth $243,000. Now, because of an upturn in the economy, the value of her investment portfolio has increased to $320,000. Even though
- Given the following information, calculate the net asset value for the New Empire small-cap mutual fund. Total assets $910 million $20 million Total liabilities Total number of shares 60 million
- Which would you choose: stock funds, bond funds, or other types of funds? Once you make your investment choices, you still have a problem because you know you should track the value and performance
- Two years ago, Bill Crandall purchased 500 shares in the no-load Vanguard Dividend Growth fund —a Morningstar four-star fund that invests in corporations that are currently paying dividends and is
- This chapter stressed the importance of evaluating potential mutual fund investments. Now it’s your turn to try your skill at evaluating a potential fund investment. To complete this case
- Julie Martin is investing $35,000 in the Invesco Charter mutual fund. The fund charges a 5.50 percent commission when shares are purchased.Calculate the amount of commission Julie must pay.
- Ted Paulson needed money to pay for unexpected medical bills. To obtain $12,000, he decided to sell some of his shares in the Ridgemoor Capital Appreciation Fund.When he called the investment
- Bill Matthews is investing $11,300 in the Washington Mutual fund. The fund charges a 5.75 percent commission when shares are purchased. Calculate the amount of commission Bill must pay.
- Nina Collins purchased the New Dimensions bond fund. While this fund doesn’t charge a front-end load, it does charge a contingent deferred sales load of 4 percent for any withdrawals in the first
- Mathew Johnston invested a total of $94,000 in the New Colony Pacific Region mutual fund. The management fee for this particular fund is 0.80 percent of the total asset value.Calculate the management
- Jane Ramirez owns shares in the Touchstone Small Cap fund that have a current value of $31,300. The fund charges an annual 12b-1 fee of 0.25 percent. What is the amount of the 12b-1 fee Ms.Ramirez
- In the prospectus for the Brazos Aggressive Growth fund, the fee table indicates that the fund has a 12b-1 fee of 0.35 percent and an expense ratio of 1.55 percent that is collected once a year on
- Assume that one year ago you bought 100 shares of a mutual fund for $33.10 per share, you received a $0.42 per-share capital gain distribution during the past 12 months, and the market value of the
- Given the information in question 10, calculate the percentage of total return for your $3,310 investment.Question 10Assume that one year ago youbought 100 shares of a mutual fund for $33.10
- Over a four-year period, Matt Ewing purchased shares in the ClearBridge Large-Cap Value Fund. Using the following information, answer the questions below. You may want to review the concept of dollar
- Assume that one year ago, you bought 210 shares of a mutual fund for $24 per share and that you received an income dividend of $0.31 cents per share and a capital gain distribution of $1.04 per share
- Given the information in question 12, calculate the percentage of total return for your $5,040 investment.Question 12Assume that one year ago, youbought 210 shares of a mutual fund for $24 per
- Since Toni Brookfield is retired, she has used income from her investment in the Alger Mid Cap growth fund to supplement her other retirement income. During one three-month period, the fund grew by
- You bought a rental property for $150,000 cash. Later you sell the property for $180,000. What was your return on investment?
- Bullion is a bulk quantity of precious metal, usually gold, platinum, or silver, assessed by weight and typically cast as ingots or bars. Dealers and some banks and brokerages sell bullion. Bullion
- Suppose you invested just $20,000 of your own money and had a $130,000 mortgage with an interest rate of 7.5 percent. After one year you sold the property for $180,000.(a) What is your gross
- Richard received a letter inviting him to participate in a drawing for a free original lithograph by a famous artist. He was asked to return a postcard with his name, address, and phone number. After
- Assume your home is assessed at $200,000. You have a $150,000 loan for 15 years at 5 percent. Your property tax rate is 2 percent of the assessed value. Assume you are in a 28 percent federal income
- “Whew! Time really does fly!” Jamie Lee thought as she unpacked from her third weekend in a row visiting colleges with the triplets. It seemed like just yesterday that Jamie Lee and Ross brought
- Assume your home is assessed at $200,000. You have a $150,000 loan for 30 years at 6 percent. Your property tax rate is 1.5 percent of the assessed value. In year one, you would pay $9,000 in
- Assume your home is assessed at $200,000. You have a $150,000 loan for 30 years at 6 percent. Your property tax rate is 1.5 percent of the assessed value. In year one, you would pay $9,000 in
- Prema purchased 15 ounces of gold in 2005 for $422 per ounce in order to try to diversify her investment portfolio. She sold a third of her holdings in gold in 2009 at a price of $944 per ounce. She
- Prema purchased 15 ounces of gold in 2005 for $422 per ounce in order to try to diversify her investment portfolio. She sold a third of her holdings in gold in 2009 at a price of $944 per ounce. She
- Prema purchased 15 ounces of gold in 2005 for $422 per ounce in order to try to diversify her investment portfolio. She sold a third of her holdings in gold in 2009 at a price of $944 per ounce. She
- Beverly is planning for her retirement. She has determined that her car is worth $10,000, her home is worth $150,000, her personal belongings are worth $100,000, and her stocks and bonds are worth
- A free and secure My Social Security account provides personalized tools for everyone, whether you receive benefits or not. You can use your account to request a replacement Social Security card,
- Calculate how much money an average older household, 65–74 years, with an annual income of $50,000 spends on food each year.
- Is a bad day fishing better than a good day at the office? Yes, according to a retired dad, Chuck. With his company pension, at least he didn’t have to worry about money. In the good old days, if
- You have $100,000 in your retirement fund that is earning 5.5 percent per year, compounding quarterly. How many dollars in withdrawals per month would keep your nest egg intact forever?
- One of the most important documents that every adult should have is a written will. This legal document specifies how you want your property to be distributed after your death. If you die
- In 2021, you gave $15,000 worth of stock to your best friend. In 2022, the stock is valued at $25,000.1. What was the gift tax in 2021?2. What is the total amount removed from your estate in 2022?
- In 2021, Joshua gave $15,000 worth of XYZ stock to his son. In 2022, the XYZ shares are worth $25,000.Calculating the Gift Tax. What was the gift tax in 2021?
- A married couple, Linda and Charles, have just learned about the death of their friend, Lloyd, and wondered whether Lloyd had provided for his family. Charles admits he doesn’t even have a
- On December 31, 2021, George gives $15,000 to his son and $15,000 to his son’s wife. One day later, on January 1, 2022, George gives another $15,000 to his son and another $15,000 to his son’s
- In 2021, Joshua gave $15,000 worth of XYZ stock to his son. In 2022, the XYZ shares are worth $25,000.What is the total amount removed from Joshua’s estate in 2022?
- In 2021, Joshua gave $15,000 worth of XYZ stock to his son. In 2022, the XYZ shares are worth $25,000.What will be the gift tax in 2021?
- In 2021, you gave a $15,000 cash gift to your best friend. What is the gift tax?
- Barry and his wife Mary have accumulated over $4 million during their 45 years of marriage. They have three children and five grandchildren.How much money can Barry and Mary gift to their children in
- Barry and his wife Mary have accumulated over $4 million during their 45 years of marriage. They have three children and five grandchildren.How much money can Barry and Mary gift to their
- Barry and his wife Mary have accumulated over $4 million during their 45 years of marriage. They have three children and five grandchildren.What is the total amount removed from Barry and Mary’s
- The date of death for a widow was 2021. If the estate was valued at $2,129,000 and the estate was taxed at 40 percent, what was the heir’s tax liability?
- Joel and Rachel are both retired. Married for 50 years, they’ve amassed an estate worth $10 million. The couple has no trusts or other types of tax-sheltered assets. If Joel or Rachel dies in 2021,
- The rule of 72 provides a guideline for determining how long it takes your money to double. This rule can also be used to determine your earning rate. If your money is expected to double in 12 years,
- Josh Collins plans to buy a house for $210,000. If that real estate is expected to increase in value by 3 percent each year, what will its approximate value be six years from now?
- Extensive online resources are available for personal finance and wise money management. As both a consumer and producer of digital content, you will locate, assess, create, and share information.In
- How much interest would you earn if you deposited $300 at 6 percent for 27 months?
- You wish to borrow $18,000 to buy a new automobile. The rate is 8.6% over four years with monthly payments. Find the monthly payment.
- If you want to have $10,000 in savings eight years from now, what amount would you need to deposit in an account that earns 5 percent?
- How much interest would you pay to borrow $670 for eight months at 12 percent?
- How much money must you have now to finance four years of college, assuming an annual cost of $48,000 and an interest rate of 6% (applied to the principal until disbursed)?
- In 2018, selected automobiles had an average cost of $16,000. The average cost of those same automobiles is now $24,000. What was the rate of increase for these automobiles between the two time
- Jamie Lee Jackson, age 23, recently decided to switch from attending college part time to full time in order to pursue her business degree and to graduate within the next three years. She has 55

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