Question: Kelly and Tim Jarowski plan to refinance

> Over a four-year period, LaKeisha Thompson purchased shares in the Oakmark Investor Class Fund. Using the information below, answer the questions that follow. You may want to review the concept of dollar cost averaging in Chapter 12 before completing thi

> Using the investment goal guidelines, assess the validity of Jamie Lee and Ross’s short- and long-term financial goals and objectives (college education for the kids; retirement; and a second home).

> Assume that one year ago, you bought 120 shares of a mutual fund for $31 a share, you received a $0.82 per-share capital gain distribution during the past 12 months, and the market value of the fund is now $36 a share. (LO13.4) A. Calculate the total re

> Three years ago, James Matheson bought 200 shares of a mutual fund for $29 a share. During the three-year period, he received total income dividends of $1.90 per share. He also received total capital gain distributions of $2.80 per share during the thr

> Jason Mathews purchased 300 shares of the Hodge & Mattox Energy Fund. Each share cost $15.15. Fifteen months later, he decided to sell his shares when the share value reached $18.10. (LO13.4) a. What was the amount of his total investment? b. What was

> The Western Capital Growth mutual fund has Total assets: $836,000,000 Total liabilities: $6,000,000 Total number of shares: 40,000,000 What is the fund’s net asset value (NAV)? (LO13.1)

> Currently, 3M Company pays an annual dividend of $5.88. If the stock is selling for $160, what is the dividend yield? (LO12.3)

> Analysts that follow JPMorgan Chase, one of the nation’s largest providers of financial services, estimate that the corporation’s earnings per share will increase from $10.87 in the current year to $11.55 next year. (LO12.3) a. What is the amount of the

> Michelle Townsend owns stock in National Computers. Based on information in its annual report, National Computers reported after-tax earnings of $9,700,000 and has issued 7,000,000 shares of common stock. The stock is currently selling for $32 a share.

> In September, the board of directors of Chaparral Steel approved a 2-for-1 stock split. After the split, how many shares of Chaparral Steel stock will an investor have if he or she owned 230 shares before the split? (LO12.1)

> Wanda Sotheby purchased 120 shares of Home Depot stock at $235 a share. One year later, she sold the stock for $218 a share. She paid her broker a $34 commission when she purchased the stock and a $39 commission when she sold it. During the 12 months

> While both bonds are considered investment grade bonds, the Microsoft bond is rated higher than the Dollar Tree bond. What does the AAA rating for the Microsoft bond mean? What does the BBB rating for Dollar Tree bond mean?

> To help evaluate the CD and the two bonds, complete the table below.

> Assuming you purchased shares in the T. Rowe Price Dividend Growth Fund on March 2, 2020, and based on your answer to question 3, how would you decide if you want to hold or sell your shares? Explain your answer.

> Sarah and James Hernandez purchased 160 shares of Macy's stock at $20 a share. One year later, they sold the stock for $24 a share. They paid a broker an $8 commission when they purchased the stock and a $12 commission when they sold the stock. During

> After reviewing Jamie Lee and Ross’s current financial situation, suggest specific and measurable short-term and long-term financial goals that can be implemented at this stage.

> On March 2, 2020, shares in theT. Rowe Price Dividend Growth Fund were selling for $51 a share. Using the internet or a newspaper, determine the current price for a share of this fund. Based on this information, would your investment have been profitable

> What other investment information would you need to evaluate this fund? Where would you obtain this information?

> Based on the research provided by Morningstar, would you buy shares in the T. Rowe Price Dividend Growth Fund? Justify your answer.

> Assuming you purchased Microsoft stock on February 7, 2020, and based on your answer to question 3, how would you decide if you want to buy more shares, hold your Microsoft shares, or sell your Microsoft stock? Explain your answer.

> On February 7, 2020, Microsoft stock was selling for $185 a share. Using the internet or a newspaper, determine the current price for a share of Microsoft. Based on this information would your Microsoft investment have been profitable? (Hint: Microsoft’s

> What other investment information would you need to evaluate Microsoft common stock? Where would you obtain this information?

> Based on the research provided by Value Line, would you invest in Microsoft stock? Justify your answer.

> Based on your research, which investment would you choose? Why? (Note: To help evaluate the bonds, begin by answering the questions on Your Personal Financial Plan Sheet 37. One information source you might use is the Financial Industry Regulatory Author

> What other information would you need to evaluate these two bonds? Where would you get this information?

> A family spends $46,000 a year for living expenses. If prices increase by 3 percent a year for the next three years, what amount will the family need for their living expenses after three years?

> Jim Johansen noticed that a corporation he is considering investing in is about to pay a quarterly dividend. The record date is Thursday, April 23, 2020. In order for Jim to receive this quarterly dividend, what is the last date that he could purchase

> In 2019, selected automobiles had an average cost of $16,000. The average cost of those same automobiles is now $20,000. What was the rate of increase for these automobiles between the two time periods?

> Using the Rule of 72, approximate the following amounts: a. If the value of land in an area is increasing 6 percent a year, how long will it take for property values to double? b. If you earn 10 percent on your investments, how long will it take for your

> If you borrow $8,000 with a 5 percent interest rate to be repaid in five equal payments at the end of the next five years, what would be the amount of each payment? (Note: Use the present value of an annuity table in the chapter appendix.)

> Tran Lee plans to set aside $2,600 a year for the next seven years, earning 3 percent. What would be the future value of this savings amount?

> A financial company that advertises on television will pay you $60,000 now for annual payments of $10,000 that you are expected to receive for a legal settlement over the next 10 years. If you estimate the time value of money at 10 percent, would you acc

> If a person spends $10 a week on coffee (assume $500 a year), what would be the future value of that amount over10years if the funds were deposited in an account earning 3 percent?

> Carla Lopez deposits $2,800 a year into her retirement account. If these funds have an average earning of 7 percent over the 40 years until her retirement, what will be the value of her retirement account?

> Pete Morton is planning to go to graduate school in a program of study that will take three years. Pete wants to have$8,000 available each year for various school and living expenses. If he earns 3 percent on his money, how much must he deposit at the st

> If you desire to have $12,000 for a down payment for a house in five years, what amount would you need to deposit today? Assume that your money will earn 4 percent.

> Using a financial calculator, Excel, or the time value of money tables in the Chapter 1 Appendix, calculate the following: a. The future value of $550 six years from now at 7 percent. b. The future value of $900 saved each year for 10 years at 8 percent

> During the four quarters for 2020, the Browns received two quarterly dividend payments of $0.32, one quarterly payment of $0.40, and one quarterly payment of $0.52. If they owned 270 shares of stock, what was their total dividend income for 2020? (LO12

> What would be the yearly earnings for a person with $9,000 in savings at an annual interest rate of 1.5 percent?

> Ben Collins plans to buy a house for $260,000. If the real estate in his area is expected to increase in value by 2 percent each year, what will its approximate value be seven years from now?

> In what ways might Eric improve his tax planning efforts?

> What are Eric’s major financial concerns in his current situation?

> Calculate the following a. What is Eric’s taxable income? (Refer to Exhibit 3–1) b. What is his total tax liability? (Use tax table, Exhibit 3-5.) What is his average tax rate? c. Based on his withholding, will Eric receive a refund or owe additional tax

> Based on the following financial data, calculate the ratios requested.

> For each of the following situations, compute the missing amount. a. Assets $65,000; liabilities $18,000; net worth $ b. Assets $86,500; liabilities $ ; net worth $18,700 c. Assets $34,280; liabilities $12,965; net worth $ d. Assets $ ; liabilities $38,3

> Use the following items to determine the total assets, total liabilities, net worth, total cash inflows, and total cash outflows. a. Total assets $ b. Total liabilities $ c. Net worth $ d. Total cash inflows $ e. Total cash outflows $

> Using the following balance sheet items and amounts, calculate the total liquid assets and total current liabilities.

> Based on the following data, determine the amount of total assets, total liabilities, and net worth.

> Casper Energy Exploration reports that the corporation’s assets are valued at $185,000,000, its liabilities are $80,000,000, and it has issued 6,000,000 shares of stock. What is the book value for a share of Casper stock? (LO12.3)

> If an adjustable-rate 30-year mortgage for $120,000 starts at 4.0 percent and increases to 5.5 percent, what is the amount of increase of the monthly payment? (Use Exhibit 7–7)

> Which mortgage would result in higher total payments? Mortgage A: $985 a month for 30 years Mortgage B: $780 a month for 5 years and $1,056 for 25 years

> Based on Exhibit 7–7, what would be the monthly mortgage payments for each of the following situations? a. A $160,000,15-year loan at 4.5 percent. b. A $215,000,30-year loan at 5 percent. c. A $190,000, 20-year loan at 6 percent.

> Estimate the affordable monthly mortgage payment, the affordable mortgage amount, and the affordable home purchase price for the following situation (see Exhibit 7–6).

> Ben and Carla Covington plan to buy a condominium. They will obtain a $220,000, 30-year mortgage, at 5 percent. Their annual property taxes are expected to be $1,800. Property insurance is $480 a year, and the condo association fee is$220 a month. Based

> Condominiums usually require a monthly fee for various services. At $235 a month, how much would a homeowner pay over a 10-year period for living in this housing facility?

> Many locations require that renters be paid interest on their security deposits. If you have a security deposit of $1,800,how much would you expect a year at 2 percent?

> You estimate that you can save $3,450 by selling your home yourself rather than using a real estate agent. What would be the future value of that amount if invested for five years at 3 percent?

> In an attempt to have funds for a down payment in five years, James Dupont plans to save $3,800 a year for the next five years. With an interest rate of 4 percent, what amount will James have available for a down payment after the five years?

> General Motors Corporations has a 1.34 beta. If the overall stock market increases by 6 percent, based on this information, how much should investors assume that General Motors will increase?

> Based on the following data, would you recommend buying or renting? Assume an after-tax savings interest rate of 6 percent and a tax rate of 28 percent. Assume this individual has other tax deductions that exceed the standard deduction amount.

> Based on the data provided here, calculate the items requested: b. the operating cost per mile.

> Based on the following data, prepare a financial comparison of buying and leasing a motor vehicle with a $24,000 cash price: What other factors should a person consider when choosing between buying or leasing?

> If a person saves $62 a month by using coupons and doing comparison shopping, (a) what is the amount for a year?(b) What would be the future value of this annual amount over 10 years, assuming an interest rate of 4 percent?

> What would be the net present value of a microwave oven that costs $159 and will save you $68 a year in time and food away from home? Assume an average return on your savings of 4 percent for five years. (Hint: Calculate the present value of the annual s

> A work-at-home opportunity is available in which you will receive 3 percent of the sales for customers you refer to the company. The cost of your “franchise fee” is $600. How much would your customers have to buy to cover the cost of this fee?

> A service contract for a video projection system costs $80 a year. You expect to use the system for six years. Instead of buying the service contract, what would be the future value of these annual amounts after six years if you earn 3 percent on your sa

> Calculate the unit price of each of the following items: a. Motor oil—2.5 quarts for $1.95 cents/quart b. Cereal—15 ounces for $2.17 cents/ounce c. Canned fruit—13 ounces for 89 cents cents/ounce d. Facial tissue—300 tissues for $2.25 cents/100 tissues

> John Walters is comparing the cost of credit to the cash price of an item. If John makes a $80 down payment and pays$35 a month for 24 months, how much more will that amount be than the cash price of $685?

> 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?