Invests the amount saved in income taxes

Assignment Help Financial Management
Reference no: EM13808255

Twins Invest. Kathryn Ake, of Omaha, Nebraska, plans to invest $3000 in mutual fund for the next 25 years to accumulate savings for retirement. Her twin sister, Kristin, plans to invest the same amount for the same length of time in the same mutual fund. Instead of investing with after-tax money, Kristin will invest through an employer-sponsored retirement plan. If both mutual fund accounts provide an 8 percent rate of return, how much more will Kristin have in her retirement account after 40 years? How much will Kristin have if she also invests the amount saved in income taxes? Assume both women pay income taxes at a 25% rate.

Reference no: EM13808255

Questions Cloud

Why projects and project management are important : Why projects and project management are important. How have you seen projects used in your personal life? Did the approach work? Why or why not?
Reflection on diversity : Reflection on Diversity
Enable michele to achieve her investment requirement : In order to fund her retirement, Michele requires a portfolio with an expected return of 0.11 per year over the next 30 years. She has decided to invest in Stocks 1, 2, and 3, with 25 percent in Stock 1, 50 percent in Stock 2, and 25 percent in Stock..
Explain how the nomination and appointment of federal judges : Explain how the nomination and appointment of federal judges differs from Supreme Court Justices. As well, explain how does the selection and length of terms differs between Supreme Court Justices and members of Congress
Invests the amount saved in income taxes : Twins Invest. Kathryn Ake, of Omaha, Nebraska, plans to invest $3000 in mutual fund for the next 25 years to accumulate savings for retirement. Her twin sister, Kristin, plans to invest the same amount for the same length of time in the same mutual f..
How to implement an environment of diversity : How to implement an environment of diversity -  Tension between personal standards and the goals of the organization.
Use case dependency for making an account deposit : Describe (in a one to two (1-2) page narrative) a use case dependency for making an account deposit. Illustrate this use case with Visio or a similar product
Compute the comparable financial ratios for next fiscal year : An analysis of last year's financial statements produced the following results. Use the following data to compute the comparable financial ratios for next fiscal year. Has the firm's financial position changed?
A random sample frm a population with mean and std dev produ : A random sample frm a population with mean and std dev produced the following sample info: n=110 x=699 s=20.4 given xbar = 699 1.  find the 95% confidence interval fr the mean u and interpret the resulting interval. 2.  find the 99% confidence interv..

Reviews

Write a Review

Financial Management Questions & Answers

  Producing a return that is equal to the required return

If an investment is producing a return that is equal to the required return, the investment's net present value will be:

  Operating leverage due to the capital intensive nature

Abrams Steel Company has very high operating leverage due to the capital intensive nature of the steel business. Abrams' CEO is concerned about the variability in the firm's EPS if sales should drop, and decides to take action. Which of the following..

  Debt analysis

Springfield Bank is evaluating Creek Enterprises, which has requested a $4,000,000 loan, to assess the firm’s financial leverage and financial risk. On the basis of the debt ratios for Creek, along with the industry averages (see the top of the next ..

  Find the normal distribution with mean

Over the last year the rates of return on these corporate stocks followed a normal distribution with mean 12.2% and standard deviation 7.2%.

  The transaction motive for holding cash refers

The transaction motive for holding cash refers to the need to have cash for which one of the following purposes?

  How do we calculate the payback period for a proposed

How do we calculate the payback period for a proposed capital budgeting project?  What are the main criticisms of the payback method?

  Examine the decision metric profit margin

Compare the decision metrics NPV & IRR for the "no recovery of NWC" and "recovery of NWC" scenarios, stating which scenario best captures reality. Based on your answer, give the project a green or red light.

  Financial statement analysis the specific purposes of this

financial statement analysis the specific purposes of this project are1. apply to real company the basic knowledge and

  Technological advancements with respect to transportation

Explain the ways in which technological advancements with respect to transportation, telecommunications, information technology and payment systems have revolutionized financial management (treasury) practices for multinational corporations.

  Annual coupon and sells-what is its yield to maturity

A bond has a $1,000 par value, 7 years to maturity, and a 9% annual coupon and sells for $1,095. What is its yield to maturity (YTM)? Assume that the yield to maturity remains constant for the next 4 years. What will the price be 4 years from today?

  Since depreciation is a cash expense

Since depreciation is a cash expense, the faster an asset is depreciated, the lower the projected NPV from investing in the asset. Under current laws and regulations, corporations must use straight-line depreciation for all assets whose lives are 5 y..

  Discuss risk associated with being over or under leveraged

If you were a small business owner would you implement an activity-based costing system. What potential benefits or pitfalls do you foresee? Discuss the risk associated with being over or under leveraged.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd