Your client, Brooke, decides to start saving for her son's college tuition. Her son was born today and will go to college at age 18 for four years. Brooke wants to save until her son's first year of college. Given the following information, what is the present value of the total amount that Brooke needs to have saved at the beginning of her son's first year of college? Current tuition: $15,000 Tuition inflation: 6.5% Brooke's investment return: 10%

Answers

Answer 1

Answer:

Answer:

The present value of the total amount that Brooke needs to have saved at the beginning of her son's first year of college is 31.959,13

Explanation:

Tuition Fees after inflation at

Year 18 = 15000* ( 1+6.5%)18 = 46599.8157

Year 19 = 15000* ( 1+6.5%)19 = 49628.8037

Year 20 = 15000* ( 1+6.5%)20 = 52854.6759

Year 21 = 15000* ( 1+6.5%)21 = 56290.2299

Since discount rate = 10%

So discount factor = 1+r = 1+10% = 1.1

Since fees are paid at beginning of period hence

Present Value of Fees = Fees (year 18)/1.1^18 +Fees at Year 19/1.1^19 +Fees at Year 20/1.1^20 + Fees at year 21/1.1^21 = 46599.8157/1.1^18 + 49628.8037/1.1^19 + 52854.6759/1,1^20 + 56290.2299^21 = 31959.13

Related Questions

Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are prepared monthly for each department. The planning budget and flexible budget for the Production Department are based on the following formulas, where q is the number of labor-hours worked in a month: Cost Formulas Direct labor $16.30q Indirect labor $4,100 + $2.00q Utilities $5,100 + $0.50q Supplies $1,300 + $0.40q Equipment depreciation $18,100 + $2.50q Factory rent $8,500 Property taxes $2,700 Factory administration $13,300 + $0.60q The Production Department planned to work 4,200 labor-hours in March; however, it actually worked 4,000 labor-hours during the month. Its actual costs incurred in March are listed below: Actual Cost Incurred in March Direct labor $ 66,780 Indirect labor $ 11,680 Utilities $ 7,590 Supplies $ 3,190 Equipment depreciation $ 28,100 Factory rent $ 8,900 Property taxes $ 2,700 Factory administration $ 15,050 Required: 1. Prepare the Production Department’s planning budget for the month. 2. Prepare the Production Department’s flexible budget for the month. 3. Calculate the spending variances for all expense items.
Warr Company is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's projected IRR can be less than the WACC or negative, in both cases it will be rejected. Year 0 1 2 3 4 Cash flows -$1,300 $450 $450 $450 $450 14.16% 14.42% 15.31% 15.84% 16.23%
Strong Metals Inc. purchased a new stamping machine at the beginning of the year at a cost of $1,567,500. The estimated residual value was $82,500. Assume that the estimated useful life was five years and the estimated productive life of the machine was 300,000 units. Actual annual production was as follows: Year Units 1 70,000 2 67,000 3 50,000 4 73,000 5 40,000 Required: 1. Complete a separate depreciation schedule for each of the alternative methods. a. Straight-line. b. Units-of-production. c. Double-declining-balance.
Mitchell, a calendar year taxpayer, is the sole proprietor of a fast-food restaurant. His adjusted basis for the building and the related land is $450,000. On March 4, 2013, state authorities notify Mitchell that his property is going to be condemned so that the highway can be widened. On June 20, Mitchell’s property is officially condemned, and he receives an award of $625,000. Because Mitchell’s business has been successful in the past, he would like to reopen the restaurant in a new location. a. What is the earliest date Mitchell can acquire a new restaurant and qualify for § 1033 postponement? b. On June 30, Mitchell purchases land and a building for $610,000. Assuming thathe elects postponement of gain under § 1033, what is his recognized gain?c. What is Mitchell’s adjusted basis for the new land and building?d. If he does not elect § 1033, what are Mitchell’s recognized gain and adjustedbasis?e. Suppose he invests the $625,000 condemnation proceeds in the stock market onJune 30. What is Mitchell’s recognized gain?
Which of the following are significant ways in which service systems differ from manufacturing systems? (You may select more than one answer)a. Service is tangible unanswered. b. You cannot inventory service checked. c. Employees do not require any technical training unanswered. d. The service itself cannot be patented checked. e. The process is part of the product

Based on our understanding of inventory cost flows, and given the information listed below for the company's fiscal year 2018, determine beginning inventory in 2018. A physical count indicated that there was $30,000 of inventory on hand at December 31, 2018 (i.e., ending inventory) Sales Freight In Purchase Returns and Allowances Sales Returns Purchase Discounts Purchases Gross Profit Sales Discounts $317,000 $7,000 $8,000 $9,000 $4,000 $245,000 $75,000 $1,000 Select one: a. $36,000 b. $29,000 C. $21,000 d. $32,000 e. $22,000

Answers

Answer:

e. $22,000

Explanation:

The computation of the beginning inventory is shown below:

We know that,

Opening inventory + Purchase - Purchase Discounts - Purchase Returns and Allowances + freight in + Gross profit = Sales - sales return - sales discount + ending inventory

Opening inventory + $245,000 - $4,000 - $8,000 + $7,000 + $75,000 = $317,000 - $9,000 - $1,000 + $30,000

Opening inventory + $315,000 = $337,000

So, the opening inventory equals to

= $22,000

Final answer:

The beginning inventory for fiscal year 2018 is $29,000. This was calculated using the principles of inventory cost flows, which led us to the cost of goods sold (COGS). From there, we used the COGS, net purchases, and ending Inventory to calculate the beginning inventory.

Explanation:

To solve this problem, inventory cost flow principles are applied. According to these, beginning inventory plus purchases minus ending inventory equals the cost of goods sold (COGS). In this case, we need to find the beginning inventory. Here is a step-by-step solution:

First, we find the net purchases. This is total purchases ($245,000) minus Purchase Returns and Allowances ($8,000) minus Purchase Discounts ($4,000). This gives us $233,000.
Next, we calculate the COGS. This is total sales ($317,000) minus Sales Returns ($9,000) minus Sales Discounts ($1,000) minus gross profit ($75,000). This gives us $232,000.
Finally, we find the beginning inventory. According to inventory cost flows, Beginning Inventory + Net Purchases - Ending Inventory = COGS. In our case, Beginning Inventory = COGS - Net Purchases + Ending Inventory. This gives us $232,000 - $233,000 + $30,000 = $29,000.

Learn more about Inventory Cost Flows here:

brainly.com/question/33558589

#SPJ6

44,000 shares of common stock outstanding at a market price of $32 a share. The common stock will pay a $1.50 annual dividend and has a dividend growth rate of 3.5 percent. There are 7,500 shares of 9% preferred stock outstanding at a market price of $92 a share. The outstanding bonds mature in 11 years, have a total face value of $825,000, a coupon rate of 6.5 percent, a face value per bond of $1,000, and a market price of $989 each. The tax rate is 35 percent. What is the weight of equity in to be use to calculate the firm's WACC?

Answers

Answer:

The weight of equity in to be use to calculate the firm's WACC is 0.48 or 48%

Explanation:

The weight of equity to be used in firm's WACC computation is market value of equity divided by the sum of market value of equity ,preferred stock and bonds.

Market value of equity=44,000*$32 =$1,408,000.00

Market value of preferred stock=7,500*$92 =$690,000

Market value of bonds=$825,000*$989/$1000=$815,925.00

Sum of market values =$ 2,913,925.00

Weight of equity=market value of equity/Sum of market values=$1,408,000.00/$2,913,925.00= 0.48 =48%

Bylie Company has an old factory machine that cost $50,000. The machine has accumulated depreciation of $28,000. Bylie has decided to sell the machine. a) What entry would Bylie make to record the sale of the machine for $25,000 cash?

b) What entry would Bylie make to record the sale of the machine for $15,000 cash?

Answers

Answer:

Cash $25000 Dr

Accumulated depreciation-Machine $28000 Dr

Machine $50000 Cr

Gain on disposal $3000 Cr

Cash $15000 Dr

Accumulated depreciation-Machine $28000 Dr

Loss on disposal $7000 Dr

Machine $50000 Cr

Explanation:

The net book value of the machine is cost - accumulated depreciation.

Thus, the NBV = 50000 - 28000 = $22000

a. The gain on disposal = Cash received - NBV

Gain on disposal = 25000 - 22000 = $3000 gain

b. The gain on disposal = 15000 - 22000 = -$7000 (loss on disposal)

The McKnight Company expects sales in 2015 of 208 comma 000 units of serving trays. McKnight's beginning inventory for 2015 is 18 comma 000 trays, and its target ending inventory is 27 comma 000 trays. Compute the number of trays budgeted for production in 2015. Select the labels and enter the amounts to calculate the units of finished goods (trays) to be produced. Budgeted unit sales 208,000 Add target ending finished goods inventory 27,000 Total required units Deduct beginning finished goods inventory –18,000 Units of finished goods to be produced

Answers

Answer:

units required to be produced 217,000

Explanation:

expected sales for the period 208,000

desired ending inventory 27,000

total units required 235,000

beginning units ( 18,000 )

units required to be produced 217,000

The company needs units to fullfil teir sales bdget and desired ending invenoty.

the beginning inventory already complete a portion of the requirement so is the difference what determinates the required units to be produced.

Information on Psi Phi Inc.âs three products are as follows: A B C Unit sales per month â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦ 1,600 3,000 1,600 Selling price per unit â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦. $10.00 $15.00 $8.00 Variable cost per unit â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦... (10.40) (12.00) (4.00) Unit contribution margin â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦.. $(0.40) $3.00 $4.00 Required: Determine the effect of each of the following situations would have on monthly profits. Each situation should be evaluated independently of all others. a) Product A is discontinued. b) Product A is discontinued and the subsequent loss of customers cause sales of Product B to decline by 200 units. c) The selling price of Product A is increased to $11.00 with a sales decrease of 300 units. d) The price of Product B is increased to $16.00 with a resulting sales decrease of 400 units. However, some of the customers shift to Product A; sales of Product A increase by 280 units. e) Product A is discontinued, and the plant in which Product A was produced is used to produce Product D, a new product. Product D has a unit contribution margin of $0.60. Monthly sales of Product D are predicted to be 1,200 units. f) The selling price of Product C is increased to $9.00 and the selling price of Product B is decreased to $14.00. Sales of Product C decline by 400 units, while sales of Product B increase by 600 units.

Answers

Answer:

fgoooo

Explanation:

fhgfh can you give me mola

Arco Corporation declared a cash dividend on June 2 of $6 per common share. The company has 2,000 shares of common stock authorized, 1,000 shares issued, and 200 in the treasury. The entry to record the declaration of the cash dividend increases a(n)

Answers

Answer:

The journal entry to record the dividend declaration is:

June 2, 202x, cash dividends are declared

Dr Retained earnings 4,800

Cr Dividends payable 4,800

The journal entry to record the payment of the dividend would be:

Dr Dividends payable 4,800

Cr Cash 4,800

When we calculate dividends, only outstanding stocks are included in the distribution: total outstanding stocks = issued stocks - treasury stocks = 1,000 - 200 = 800

Other Questions

The following information pertains to Alpha Computing at the end of 2015: Assets $972,500 Liabilities $450,000 Net Income $237,500 Common Stock $370,000 Alpha Computing's Retained Earnings account had a zero balance at the beginning of 2015. What amount of dividends did the company pay in 2015?

Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $15.00 per ball, of which 60% is direct labor cost. Last year, the company sold 50,000 of these balls, with the following results:_______. Sales (50,000 balls) $ 1,250,000 Variable expenses 750,000 Contribution margin 500,000 Fixed expenses 320,000 Net operating income $ 180,000Required: 1. Compute (a) last year's CM ratio and the break-even point in balls, and (b) the degree of operating leverage at last year’s sales level. 2. Due to an increase in labor rates, the company estimates that next year's variable expenses will increase by $3.00 per ball. If this change takes place and the selling price per ball remains constant at $25.00, what will be next year's CM ratio and the break-even point in balls? 3. Refer to the data in (2) above. If the expected change in variable expenses takes place, how many balls will have to be sold next year to earn the same net operating income, $202,000, as last year? 4. Refer again to the data in (2) above. The president feels that the company must raise the selling price of its basketballs. If Northwood Company wants to maintain the same CM ratio as last year (as computed in requirement 1a), what selling price per ball must it charge next year to cover the increased labor costs? 5. Refer to the original data. The company is discussing the construction of a new, automated manufacturing plant. The new plant would slash variable expenses per ball by 40.00%, but it would cause fixed expenses per year to double. If the new plant is built, what would be the company’s new CM ratio and new break-even point in balls? 6. Refer to the data in (5) above. a. If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $202,000, as last year? b. Assume the new plant is built and that next year the company manufactures and sells 37,000 balls (the same number as sold last year). Prepare a contribution format income statement and compute the degree of operating leverage.

The Model E extender fits with the 2 inch heavy duty hitches.The contract calls for 247 Model E extenders per week to be delivered in equal installments over the 16 weeks of the contract. The goal of Alpha Assemblies is to work 40 hours per week. The actual work time for completing the Model E extenders has been broken down by process in the table below. Also provided is the anticipated learning rate for each process. All processes must be performed in sequence and each step has its own separate and unique workcenter. To achieve the goal of working 40 hours per week or less, the cycle time must be lower than the takt time. What is the expected Cycle Time for Model E in Week 16? Note: learning is applied to the batch quantity per week. Do not try to break out the units within a week.Process Time Required per Unit Predecessor Task Learning RateA 9 82B 12 A 86C 18 B 81D 9 C 90E 12 D 80F 17 E 88G 14 F 83H 12 G 85I 8 H 82

Suppose the corrective tax policy and the number of pollution permits available do not change in spite of this demand shift. As a result of the technology change, the price of pollution will change under , and the quantity of pollution will change under