Question

4) a) You decide that your family would be comfortable living on an annual income of $150,000, growing at 4% per year. Youd also like to continue generating this cash flow for descendants, forever. With interest rates of 8%, how much wealth would you need today to provide this income starting with S50,000 one year from now? your b) Suppose all income is taxed at 20%. How would this (if at all) change your answer to a)? Assume that you still feel 4% growth and $150,000 (after-tax) income is sufficient. Show a calculation and briefly explain

0 0
Add a comment Improve this question Transcribed image text
Know the answer?
Add Answer to:
4) a) You decide that your family would be comfortable living on an annual income of...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • 4) a) You decide that your family would be comfortable living on an annual income of...

    4) a) You decide that your family would be comfortable living on an annual income of S150,000, growing at 4% per year. You'd also like to continue generating this cash flow for your descendants, forever. With interest rates of 8%, how much wealth would you need today to provide this income starting with $150,000 one year from now? b) Suppose all income is taxed at 20%. How would this (if at all) change your answer to a)? Assume that you...

  • a) You decide that your family would be comfortable living on an annual income of $150,000,...

    a) You decide that your family would be comfortable living on an annual income of $150,000, growing at 4% per year. You’d also like to continue generating this cash flow for your descendants, forever. With interest rates of 8%, how much wealth would you need today to provide this income starting with $150,000 one year from now? b) Suppose all income is taxed at 20%. How would this (if at all) change your answer to a)? Assume that you still...

  • Please Refrain from using Excel Thanks! 4) a) You decide that your family would be comfortable...

    Please Refrain from using Excel Thanks! 4) a) You decide that your family would be comfortable living on an annual income of $150,000, growing at 4% per year. You'd also like to continue generating this cash flow for your descendants, forever. With interest rates of 8%, how much wealth would you need today to provide this income starting with S150,000 one year from now? b) Suppose all income is taxed at 20%. How would this (if at all) change your...

  • 3) a) If the corporate tax rate is 30% and the individual tax rate is 10%...

    3) a) If the corporate tax rate is 30% and the individual tax rate is 10% (and these are the only taxes), a corporation with $20,000 of operating income, what is the after-tax disposable income the corporation generated for its owners? The tax rate is 5% between $0-$10,000 and 12% between $10,001 _$20,000. If you earn $12,000, then what is the average tax rate and the marginal tax rate? b) 4) a) You decide that your family would be comfortable...

  • 3) a) If the corporate tax rate is 30% and the individual tax rate is 10%...

    3) a) If the corporate tax rate is 30% and the individual tax rate is 10% (and these are the only taxes), a corporation with $20,000 of operating income, what is the after-tax disposable income the corporation generated for its owners? The tax rate is 5% between $0-$10,000 and 12% between $10.001-$20,000. If you earn $12,000. then what is the average tax rate and the marginal tax rate? 4) a) You decide that your family would be comfortable living on...

  • Note: You MUST show ALL your work to receive FULL credit- that is, show timelines and...

    Note: You MUST show ALL your work to receive FULL credit- that is, show timelines and calculator sequence to justify your answers. 1. Scott Frost has just won the Cornhusker Sweepstakes. He is entitled to receive one of the following prizes: a. $100,000 per year forever with the first payment received today b. $40,000 beginning next year growing by 4% forever. c. $200,000 for ten years starting in year 6. d. Ten payments of $150,000 per year starting one year...

  • SOLVE WITH A FINANCIAL CALCULATOR Note: You MUST show ALL your work to receive FULL credit-that...

    SOLVE WITH A FINANCIAL CALCULATOR Note: You MUST show ALL your work to receive FULL credit-that is, show timelines and calculator sequence to justify your answers. He is entitled to receive one of the following prizes: Scott Frost has just won the Cornhusker Sweepstakes. a. $100,000 per year forever with the first payment received today b, $40,000 beginning next year growing by 4% forever. c. $200,000 for ten years starting in year 6. d. Ten payments of $150,000 per year...

  • You are the pension fund manager for a consulting company. Your workers will begin to retire...

    You are the pension fund manager for a consulting company. Your workers will begin to retire 10 years from now. You estimate that you will need $1.2 million exactly 10 years from now to fund the first year payments. Due to inflation and growth in the number of retirees, your annual obligations will grow by 5% per year, and will continue forever. Your financial advisors tell you that you can plan on earning 8.0% per year on invested funds. (a)...

  • please answer Question 4 20 pts Your annual bonus this year was $15,000. You decide to...

    please answer Question 4 20 pts Your annual bonus this year was $15,000. You decide to use the money to remodel your bathroom or install solar panels on your roof. In either case, you will spend the entire $15,000. If you install solar panels, you will save $100 per month on your electric bill, each month, for 120 months, starting next month. If you remodel your bathroom, you expect to increase the value of the house by $9,000 today. If...

  • You are the pension fund manager for a consulting company. Your workers will begin to retire 10 years from now. You estimate that you will need $1.2 million exactly 10 years from now to fund the first...

    You are the pension fund manager for a consulting company. Your workers will begin to retire 10 years from now. You estimate that you will need $1.2 million exactly 10 years from now to fund the first year payments. Due to inflation and growth in the number of retirees, your annual obligations will grow by 5% per year, and will continue forever. Your financial advisors tell you that you can plan on earning 8.0% per year on invested funds. (a)...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT