What is the maximum contribution

Assignment Help Financial Management
Reference no: EM131523967

Eric, age 53, had the following items of income:

1. Investment returns as a limited partner in a partnership of $1,200.

2. Unemployment compensation of $350.

3. Income from a law practice of $600.

4. Deferred compensation from a former employer of $14,000.

5. Alimony of $750.

6. Wages of $1,000.

What is the maximum contribution Eric can make to an IRA in 2016?

(a) $2,350.

(b) $2,700.

(c) $5,500.

(d) $6,500.

Reference no: EM131523967


Write a Review


Financial Management Questions & Answers

  What is internal rate of return and will you accept reject

A project has cash flows of -$152,000, $60,800, $62,300, and $75,000 for years 0 to 3, respectively. The required rate of return is 13 percent. Based on the internal rate of return of _____ percent for this project, you should _____ the project? What..

  Pro forma income statement for the first twelve

Prepare a pro forma income statement for the first twelve (12) months of your business. Include the assumptions on which it is based.

  REPO market for funds used to originate mortgages

A financial institution is permitted to use leverage up to a maximum debt to equity ratio of 20. Currently the bank finances its $ 100 of assets with $10 of equity. New Century Financial relied heavily on the REPO market for funds used to originate m..

  Calculate maturity risk premium on treasury security

A two-year Treasury security currently earns 5.13 percent. Over the next two years, the real interest rate is expected to be 2.15 percent per year and the inflation premium is expected to be 1.75 percent per year. Calculate the maturity risk premium ..

  What is the projects operating cash flow for the first year

What is the project's operating cash flow for the first year (t=1)?

  Adverse effect on other part of firms overall operations

An externality is a situation where a project would have an adverse effect on some other part of the firm's overall operations. If the project would have a favorable effect on other operations, then this is not an externality. An example of an extern..

  What rate of return would robin earn from her investment

Robin wants to purchase 1,000 shares of Anatop, Inc., which is selling for $5 per share. Anatop does not pay dividends because all earnings are reinvested in the firm to maintain its successful R&D department. How much of her own money must Robin pro..

  What is the equivalent present worth for the investment

A $90,000 investment is made. Over a 5-year period, a return of $30,000 occurs at the end of the first year. Each successive year yields a return that is 7% less than the previous year’s return. If money is worth 5%, what is the equivalent present wo..

  Inventory at cost by the retail method

Melissa's Dress Shop inventory at cost on January 1 was $19,400. Its retail value was $36,000. During the year, additional net purchases at a cost of $42,600 was brought in. Its retail value was $64,000. The net sales for the year was $70,000. Meliss..

  Pension plan is an annuity with guaranteed return

Meg's pension plan is an annuity with a guaranteed return of 7% per year (compounded quarterly). She would like to retire with a pension of $30,000 per quarter for 10 years. If she works 22 years before retiring, how much money must she and her emplo..

  Total amts that make banks balance sheet balance

Second National Bank Balance Sheet as of _____date (figures in million$) Assets: Cash assets: 5 Government Securities owned: 7 Loan secured by real estate: 30 Commercial industrial loans : 18 Bank fixed assets: 14 Total Assets 74 Liabilities Federal ..

  Would you recommend hedging this euro receivable

General Electric sold jet engines on credit to Air France and invoiced €10 million payable in six months. Currently, the six-month forward exchange rate is $1.25/€ and the foreign exchange advisor for General Electric predicts that the spot rate is l..

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