What impact on Jamie Lee’s income would the gift of $1,000 from her great aunt have on her adjusted gross income? Would there be an impact on the adjusted gross income with her $2,000 raffle prize winnings? Explain your answer.
> A class-action suit against a utility company resulted in a settlement of $1.4 million for 62,000 customers. If the legal fees, which must be paid from the settlement, are $300,000, what amount will each plaintiff receive? (LO 6.4)
> Jamie and Peter Dawson own 180 shares of Duke Energy common stock. Duke Energy's quarterly dividend is $0.95 per share. What is the amount of the dividend check the Dawson couple will receive for this quarter? (LO12.1)
> Based on the following, calculate the costs of buying versus leasing a motor vehicle.
> An online buying club offers a membership for $300, for which you will receive a 10 percent discount on all brand-name items you purchase. How much would you have to buy to cover the cost of the membership?
> What is the annual opportunity cost of a checking account that requires a $300 minimum balance to avoid service charges? Assume an interest rate of 3 percent.
> A certificate of deposit will often result in a penalty for withdrawing funds before the maturity date. If the penalty involves two months of interest, what would be the amount for early withdrawal on a $20,000, 5 percent CD?
> Janie has a joint account with her mother with a balance of $562,000. Based on $250,000 of Federal Deposit Insurance Corporation coverage, what amount of Janie’s savings would not be covered by deposit insurance?
> With a 28 percent marginal tax rate, would a tax-free yield of 7 percent or a taxable yield of 9.5 percent give you a better return on your savings? Why?
> What would be the annual percentage yield for a savings account that earned $56 in interest on $800 over the past 365 days?
> For each of these situations, determine the savings amount. Use the time value of money tables in Chapter 1 (Exhibit 1–3)or in the Chapter 1 appendix. a. What would be the value of a savings account started with $700, earning 4 percent (compounded annua
> A payday loan company charges 6 percent interest for a two-week period. What would be the annual interest rate from that company?
> If a person has ATM fees each month of $16 for six years, what would be the total cost of those banking fees?
> After researching Valero Energy common stock, Sandra Pearson is convinced the stock is overpriced. She contacts her account executive and arranges to sell short 250 shares of Valero Energy. At the time of the sale, a share of common stock had a value o
> Based on the following information, prepare a bank reconciliation (see page 131) to determine adjusted (corrected) balance:
> What would be the net annual cost of the following checking accounts? a. Monthly fee, $3.75; processing fee, 25 cents per check; checks written, an average of 14 a month. b. Interest earnings of 4 percent with a $500 minimum balance; average monthly bala
> A bank that provides overdraft protection charges 12 percent for each $100 (or portion of $100) borrowed when an over draft occurs. a. What amount of interest would the customer pay for a $188 overdraft? (Assume the interest is for the full amount borro
> An ATM with a service fee of $2 is used by a person 100 times in a year. What would be the future value in 10 years (use a 2 percent rate) of the annual amount paid in ATM fees?
> Using the tax table in Exhibit 3–5, determine the amount of taxes for the following situations: a. A head of household with taxable income of $89,525. b. A single person with taxable income of $89,001. c. A married person filing a separate return
> If 300,000 people each receive an average refund of $2,500, based on an interest rate of 3 percent, what would be the lost annual income from savings on those refunds?
> Using the tax table on page 80, determine the amount of taxes for the following situations: a. A head of household with taxable income of $55,000. b. A single person with taxable income of $35,000. c. Married taxpayers filing jointly with taxable i
> Noor Patel has had a busy year! She decided to take a cross-country adventure. Along the way, she won a new car on the “Price Is Right” (valued at $15,500) and won $500 on a scratch-off lottery ticket (the first time she ever played). She also signed up
> If $4,323 was withheld during the year and taxes owed were $4,122, would the person owe an additional amount or receive a refund? What is the amount?
> Based on the following data, would Beth and Roger Simmons receive a refund or owe additional taxes? Adjusted gross income, $42,140 Standard deduction, $24,800 Credit for child and dependent care expenses, $400 Federal income tax withheld, $2,017 Tax ra
> Jamie Lee and Ross are ready to evaluate a mutual fund more closely. Choose a mutual fund that has been mentioned in Chapter 13 or one that has been recommended by a friend or family member, and complete Your Personal Financial Plan Sheet #41.Based on
> What would be the average tax rate for a person who paid taxes of $4,706 on a taxable income of $40,780?
> If Samantha Jones had the following itemized deductions, should she use Schedule A or the standard deduction? The standard deduction for her tax situation is $12,400. Donations to church and other charities, $5,050 Medical and dental expenses exceedin
> Would you prefer a fully taxable investment earning 10 percent or a tax-exempt investment earning 8.25 percent? Why? (Assume a 24 percent tax rate.) (LO 3.4)
> Allison has returned to school after five years out of the work force. She is taking one course at the local university for a cost of $1,500. To maximize her taxes, should she take a tuition and fees deduction or an education credit? (Assume a 15 percent
> Julia Sims has $30,000 of adjusted gross income and $5,000 of medical expenses. She will be itemizing her tax deductions this year. The most recent tax year has a medical expenses floor of 10%. How much of a tax deduction will Julia be able to deduct?
> Wendy Brooks prepares her own income tax return each year. A tax preparer would charge her $75 for this service. Over a period of 10 years, how much does Wendy gain from preparing her own tax return? Assume she can earn 3 percent on her savings.
> Daniel Simmons arrived at the following tax information:
> If a person with a 32 percent tax bracket makes a deposit of $5,000 to a tax-deferred retirement account, what amount would be saved on current taxes?
> Reginald Sims deposits $5,500 each year in a tax-deferred retirement account. If he is in a 22 percent tax bracket, what amount would his tax be reduced over a 20-year time period?
> On December 30, you decide to make a $3,000 charitable donation. a. If you are in the 24 percent tax bracket, how much will you save in taxes for the current year? b. If you deposit that tax savings in a savings account for the next five years at 8 perce
> Jamie Lee and Ross have been reading quite a lot about stock funds. At Jamie Lee and Ross’s stage in life, what different types of stock funds would you recommend for them to invest their $50,000 inheritance in? Why? a. The financial pl
> Kara George received a $5,000 gift for graduation for her uncle. If she deposits this in an account paying 3 percent, what will be the value of this gift in 12 years?
> Brenda plans to reduce her spending by $50 a month. What would be the future value of this reduced saving over the next10 years? (Assume an annual deposit to her savings account, and an annual interest rate of 3 percent.)
> Use future value and present value calculations (see tables in the Chapter 1 Appendix) to determine the following: a. The future value of a $600 savings deposit after eight years at an annual interest rate of 6 percent. b. The future value of saving $1,
> Fran Powers created the following budget and reported the actual spending listed. Calculate the variance for each of these categories, and indicate whether it was a deficit or a surplus.
> The Brandon household has a monthly income of $5,630 on which to base their budget. They plan to save 10 percent and spend 32 percent on fixed expenses and 56 percent on variable expenses. a. What amount do they plan to set aside for each major budget se
> For the following situations, calculate the cash surplus or deficit:
> Carl Lester has liquid assets of $2,680 and current liabilities of $2,436. What is his current debt ratio? What comments do you have about this financial position?
> The Fram family has liabilities of $128,000 and a net worth of $340,000. What is the debt ratio? How would you assess this?
> Compare tax services (and providers) in your area and online. Talk to friends, relatives, and others about the providers that they use.
> Using an online search, determine the tax deductions and credits for which you may be eligible for the current year.
> It has been suggested by Jamie Lee and Ross’ professional investment counselor to perform a financial check-up as the first step in investing in mutual funds, even though they are investing $50,000 that was inherited from Ross’ late uncle’s estate. Is i
> Estimate the amount of all types of tax that you have paid in the last month
> Survey friends and relatives about their tax planning strategies. Do most people get a federal tax refund or owe taxes each year? Is their situation (refund or payment) planned?
> Using Exhibit 3-1 as a guide, calculate Jamie Lee’s Adjusted Gross Income amount by completing the table below:
> Jamie Lee has a marginal tax rate of 15% and an average tax rate of 11%. Explain why there is a difference between the two rates.
> What would Jamie Lee’s filing status be considered?
> 1) One way to identify if your college is a good investment is to review their: a) Return on Investment b) Maximum Loan Amount c) College Culture d) Average Class Size 2) The main form to qualify for Federal student aid is: a) FAFSA, Free Application fo
> For each of the following situations, what amount would the insurance company pay? (LO8.2) a. Wind damage of $1,835; the insured has a deductible of $500. b. Theft of a stereo system worth $4,000; the insured has a deductible of $500. c. Vandalism that d
> If Carissa Dalton has a $260,000 home insured for $200,000, based on the 80 percent coinsurance provision, how much would the insurance company pay on a $10,000 claim? (LO8.2)
> What would it cost an insurance company to replace a family’s personal property that originally cost $40,000? The replacement costs for the items have increased 15 percent. (LO8.2)
> Suppose Jamie Lee and Ross are evaluating corporate stocks to add to their investment portfolio. Using Your Personal Financial Plan Sheet 38, select a company from your own personal experience, such as an automobile or technology company, and research th
> Describe the stage in the adult life cycle (Chapter 1, Exhibit 1-4) that Jamie Lee and Ross are experiencing right now. What are some of the financial activities that they should be participating in at this stage?
> Aaron Zeitel is a high school senior deciding which college to attend in the fall. He has narrowed his choices to three liberal arts schools: Arrington, Barton, and Claiborne. His criteria for selection are the school’s academic reputat
> Carol Latta is visiting hotels in Los Angeles to decide where to hold a convention for a national organization of college business school teachers she represents. There are three hotels from which to choose—the Cheraton, the Milton, and
> Station WRCH in Richmond, Virginia, is interviewing candidates for the job of news anchor on its 6:00 p.M. Eyewitness News show. There are three final candidates for the job—June Pawlie, Kellie Cooric, and Tim Brokenaw. The criteria the
> Alex Wall is shopping for a new four-wheel-drive utility vehicle and has identified three models from which she will choose—an Explorer, a Trooper, and a Passport. She will make her selection based on Consumer Digest ratings, price, and
> In Problem 22, if Megan Moppett has $85,000 to invest and she wants to diversify by investing in all three funds, how much should she invest in each?
> Megan Moppett is a sales representative for Technical Software Systems (TSS), and she receives a commission for every new system installation she sells to a client. Her earnings during the past few years have been very high, and she wants to invest in a
> In Problem 13 in Chapter 6, Computers Unlimited sells microcomputers and distributes them from three warehouses to four universities. The available supply at the three warehouses, demand at the four universities, and shipping costs are shown in the follo
> Katnis Evergreen, a junior at Tech, is moving out of the dorms where she has lived for 2 years into an apartment in town. She is considering three apartment complexes—the Terraces, the Vistas, and Foxfield. She is going to evaluate the
> A Non-Resident Indian (NRI) wants to buy an apartment in India to use it when he returns home. He considers four factors—climate, infrastructure, resale value, and services—to make his decision. His friends recommended
> An interior design and construction company produces two types of tiles—floor tiles and wall tiles. Floor tiles are made with slightly rough surface to make it nonslippery; whereas wall tiles are made with smooth and mirror finish. The company currently
> The Oakdale County School Board was meeting in special session. A federal judge had ordered the board to present an acceptable busing plan for racially balancing the four high schools in Oakdale County within a week. The judge had previously given the sc
> Infocomp Systems Lab is a research and development (R&D) company that develops computer systems and software primarily for the medical industry. The lab has proposals from its own researchers for eight new projects. Each of the proposed research proj
> Mac’s Warehouse is a large discount store that operates 7 days per week. The store needs the following number of full-time employees working each day of the week: Each employee must work 5 consecutive days each week and then have 2 days
> The Eaststate Manufacturing Company produces four different airplane parts from fabricated sheet metal for several major aircraft companies. The manufacturing process consists of four operations—stamping, assembly, finishing, and packag
> A rural clinic hires its staff from nearby cities and towns on a part-time basis. The clinic attempts to have a general practitioner (GP), a nurse, and an internist on duty during at least a portion of each week. The clinic has a weekly budget of $1,200.
> A company wants to produce two products, A and B, using three resources—machine hours, raw material, and assembly time—as given in the table below. The company wants to satisfy the following goals: (1) Achieve total sa
> The East Midvale Textile Company produces denim and brushed-cotton cloth. The average production rate for both types of cloth is 1,000 yards per hour, and the normal weekly production capacity (running two shifts) is 80 hours. The marketing department es
> The Wearever Carpet Company manufactures two brands of carpet—shag and sculptured—in 100-yard lots. It requires 8 hours to produce one lot of shag carpet and 6 hours to produce one lot of sculptured carpet. The company has the following production goals,
> A manufacturing company produces products 1, 2, and 3. The three products have the following resource requirements and produce the following profit: At present, the firm has a daily labor capacity of 240 available hours and a daily supply of 400 pounds o
> A group of developers is building a new shopping center. A consultant for the developers has constructed the following project network and assigned activity times, in weeks. Determine the earliest and latest activity times, activity slack, critical path,
> In one of the little-known battles of the Civil War, General Tecumseh Beauregard lost the Third Battle of Bull Run because his preparations were not complete when the enemy attacked. If the critical path method had been available, the general could have
> Moore Housing Contractors is negotiating a deal with Countryside Realtors to build six houses in a new development. Countryside wants Moore Contractors to start in late winter or early spring, when the weather begins to moderate, and build on through the
> Given the following network, with activity times in weeks, determine the earliest and latest activity times and the slack for each activity. Indicate the critical path and the project duration:
> Given the following network, with activity times in months, determine the earliest and latest activity times and slack for each activity. Indicate the critical path and the project duration.
> For the network in Problem 4, determine the earliest and latest activity times and the slack for each activity. Indicate how the critical path would be determined from this information.
> The following table provides the crash data for the network project described in Problem 6: Using the computer, crash the network to 32 months. Indicate the first critical path activities and then the cost of crashing the network.
> Identify all the paths in the following network, compute the length of each, and indicate the critical path (activity times are in weeks):
> The following table provides the crash data for the network project described in Problem 15: The normal activity times are considered to be deterministic and not probabilistic. Using the computer, crash the network to 26 weeks. Indicate how much it would
> Reconstruct the example problem at the end of this chapter as an AOA network. Assume that the most likely times (m) are the normal activity times and that the optimistic times (a) are the activity crash times. Further assume that the activities have the
> Formulate the general linear programming model for the project network for installing an order processing system shown in Figure 8.14 and solve it.
> A project has six activities on arcs as shown in the diagram. The values on the arcs are the duration of activities in days. a. Formulate a linear programming model for this project. b. Find the critical duration using computer.
> The following table provides the information necessary to construct a project network and project crash data: a. Construct the project network. b. Manually crash the network to 28 weeks. c. Formulate the general linear programming model for this network.
> John Aaron called the meeting of the Programs and Arts Committee of the Student Government Association to order. “Okay, okay, everybody, quiet down. I have an important announcement to make,” he shouted above the noise. The room got quiet, and John start
> The following table provides the information necessary to construct a project network and project crash data: a. Construct the project network. b. Compute the total allowable crash time per activity and the crash cost per week for each activity. c. Deter
> The following table contains the activities for planning a wedding and the activity time estimates; however, the precedence relationships between activities are not included: Using your best judgment, determine the project network, critical path, and exp
> During a violent thunderstorm with very high wind gusts in the third week of March, the broadcast tower for the public radio station WVPR, atop Poor Mountain in Roanoke, collapsed. This greatly reduced the strength of the station’s sign
> The Valley United Soccer Club is planning a soccer tournament for the weekend of April 29 and 30. The club’s officers know that by March 30 they must send out acceptances to teams that have applied to enter and that by April 15 they mus
> Lakeland-Bering Aircraft Company is preparing a contract proposal to submit to the Defense Department for a new military aircraft, the X-300J jet fighter. Part of the proposal is a development and production schedule for completion of the first aircraft.
> Construct a Gantt chart and project network for the following set of activities, compute the length of each path in the network, and indicate the critical path:
> A marketing firm is planning to conduct a survey of a segment of the potential product audience for one of its customers. The planning process for preparing to conduct the survey consists of six activities, with precedence relationships and activity time
> PM Computers is an international manufacturer of computer equipment and software. It is going to introduce a number of new products in the coming year, and it wants to develop marketing programs to accompany the product introductions. The marketing progr
> RusTech Tooling is a large job shop operation that builds machine tools and dies to manufacture parts for specialized items. The company primarily bids on government-related contracts to produce parts for such items as military aircraft and weapons syste
> On May 21, 1927, Charles Lindbergh landed at Le Bourget Field in Paris, completing his famous transatlantic solo flight. The preparation period prior to his flight was quite hectic, and time was very critical because several other famous pilots of the da
