In order to make the interest payments of approximately $23.1 million a year, the state added...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
In order to make the interest payments of approximately $23.1 million a year, the state added new taxes on electronic pull tabs, in addition to a couple other minor tax increases. The success of electronic pull tabs exceeded the state's expectations and the bond reserve fund from the electronic pull tab taxes grew much faster than expected. Also, the state of Minnesota has a budget surplus this upcoming year, which allows the state some options on what to do with the surplus funds. Our Minnesota Governor is considering paying off these bonds early using the bond reserve and surplus funds. In fact, if the bonds were retired by June 2023, this would be about 20 years ahead of schedule. The state would save approximately $462 million (annual cash interest payment of $23,100,000* 20 years). What is a bond reserve fund? A pro of paying off the bonds early is the savings of the future cash interest payments calculated above. What is one con of paying off the bonds early? In order to make the interest payments of approximately $23.1 million a year, the state added new taxes on electronic pull tabs, in addition to a couple other minor tax increases. The success of electronic pull tabs exceeded the state's expectations and the bond reserve fund from the electronic pull tab taxes grew much faster than expected. Also, the state of Minnesota has a budget surplus this upcoming year, which allows the state some options on what to do with the surplus funds. Our Minnesota Governor is considering paying off these bonds early using the bond reserve and surplus funds. In fact, if the bonds were retired by June 2023, this would be about 20 years ahead of schedule. The state would save approximately $462 million (annual cash interest payment of $23,100,000* 20 years). In order to make the interest payments of approximately $23.1 million a year, the state added new taxes on electronic pull tabs, in addition to a couple other minor tax increases. The success of electronic pull tabs exceeded the state's expectations and the bond reserve fund from the electronic pull tab taxes grew much faster than expected. Also, the state of Minnesota has a budget surplus this upcoming year, which allows the state some options on what to do with the surplus funds. Our Minnesota Governor is considering paying off these bonds early using the bond reserve and surplus funds. In fact, if the bonds were retired by June 2023, this would be about 20 years ahead of schedule. The state would save approximately $462 million (annual cash interest payment of $23,100,000* 20 years). What is a bond reserve fund? What is a bond reserve fund? A pro of paying off the bonds early is the savings of the future cash interest payments calculated above. What is one con of paying off the bonds early? A pro of paying off the bonds early is the savings of the future cash interest payments calculated above. What is one con of paying off the bonds early?
Expert Answer:
Answer rating: 100% (QA)
What is a bond reserve fund A bond reserve fund is a dedicated fund set up to ensure that there is s... View the full answer
Related Book For
Taxation Of Individuals And Business Entities 2019 Edition
ISBN: 9781259918391
10th Edition
Authors: Brian C. Spilker, Benjamin C. Ayers, John Robinson, Edmund Outslay, Ronald G. Worsham, John A. Barrick, Connie Weaver
Posted Date:
Students also viewed these accounting questions
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
List three specific parts of the Case Guide, Objectives and Strategy Section (See below) that you had the most difficulty understanding. Describe your current understanding of these parts. Provide...
-
The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...
-
Gray Corporation began operations on January 1, 2017. The following information is available for Gray Corporation on December 31, 2017. Prepare an income statement, a retained earnings statement, and...
-
Bertram writes a check for $200 payable to cash. He puts the check in his pocket and drives to the bank to cash the check. As he gets out of his car in the banks parking lot, the check slips out of...
-
Samples of cartridge brass (Cu-30% Zn) were cold rolled and then annealed for one hour. The data shown in the table below were obtained. (a) Plot the yield strength and grain size as a function of...
-
Referring to Exercise 12.3, use Bonferroni simultaneous confidence intervals with \(\alpha=0.06\) to compare the mean number of electrodes coated by the experiment under the 3 different alternatives....
-
Many multidivisional firms do not report revenues or profits by division or segment in their Form 10K or Annual Report. What are pros and cons of this management practice? Discuss.
-
Selected current year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31 of the prior year were inventory, $55,900; total...
-
The Gilbert Air-Conditioning Company is considering the purchase of a special shipment of portable air conditioners manufactured in Japan. Each unit will cost Gilbert $80, and it will be sold for...
-
5. Implement the nursing process in the care of the patient being treated with antipsychotics.
-
What is social audit? Give your views on the objectives of social audit. Discuss the position of social audit in Indian scenario?
-
Define and explain the terms Fraud and Error.
-
What is audit memorandum?
-
How the auditor of a company carrying on life insurance business is appointed?
-
What are the provisions of the Insurance Act, 1938 regarding submission of reports and returns by the insurance companies?
-
Use the following information to compute profit margin for each separate company a through e. (Round your answers to 1 decimal place.) Company Net Income R. 5$ b. C. d 0 Not Sales 5,836 $ 94,864...
-
Maria Castigliani is head of the purchasing department of Ambrosiana Merceti, a medium-sized construction company. One morning she walked into the office and said, The main problem in this office is...
-
Harrison Corporation reported pretax book income of $600,000. Tax depreciation exceeded book depreciation by $400,000. In addition, the company received $300,000 of tax-exempt municipal bond...
-
Aggie Corporation made a distribution of $500,000 to Rusty Cedar in partial liquidation of the company on December 31 of this year. Rusty, an individual, owns 100% of Aggie Corporation. The...
-
Assume that in 2018 Hill Corporation reported a net operating loss of $10,000 that it carried forward to year 2019. In 2018, Hill also reported a net capital loss of $3,000 that it carried forward to...
-
Eq. 7.36a is written for the conservation of momentum in y direction. Obtain Eq. 7.36-b wherein the stream function is independent variable. Eq. 7.36(a,b) y - v v +(1-y/R)v- + momentum: u u R-y + R P...
-
Using Maslen method, find the approximate value of pressure and density at the junction of the sphere and the cone of Problem 7.29 at Mach number 8. Problem 7.29 An empirical way to determine shock...
-
Show that the derivative of the boundary layer edge velocity is given by Eq. 7.64 for the figure given below. Eq. 7.64 M>>1 Ue dx R dy/dx = 1/R
Study smarter with the SolutionInn App