FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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You purchased 74 shares of Z stock in January 2008 for $40 per share. Each year you received a cash dividend of S0.75 per share. In December of
2012, you sold 74 shares of Z for $60 per share. Brokerage fees amounted to 3.0% of the purchase price and 3.0% of the sales proceeds. Use this
information to answer the next 5 questions,
19. What would be your future account value (after-tax and after inflation) if you invested $600 each month into a growth mutual fund for 35 years?
Assume an average annual rate of return of 7.5 percent. Assume a combined federal and state income tax rate of 28% and an average annual inflation
rate of 2.7 percent.
O $362419.38
O $449,687.25
O $418,469,15
O $412.758.60
You purchased 74 shares of Z stock in January 2008 for $40 per share. Each year you received a cash dividend of $0.75 per share. In December of
2012. you sold 74 shares of Z for $60 per share. Brokerage fees amounted to 3.0% of the purchase price and 3.0% of the sales proceeds, Use this
information to answer the next 5 questions.
20. What would your future account value (after-tax and inflation) if you invest $10,000 each year into a mutual fund for 20 years? Assume an annual
rate of return of 11.0 pefcent. Assume an income tax rate of 22% and an inflation rate of 3.5 percent.
O $38a.459.62
O $343.534.54
O $327470.02
$488.107.40
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Transcribed Image Text:You purchased 74 shares of Z stock in January 2008 for $40 per share. Each year you received a cash dividend of S0.75 per share. In December of 2012, you sold 74 shares of Z for $60 per share. Brokerage fees amounted to 3.0% of the purchase price and 3.0% of the sales proceeds. Use this information to answer the next 5 questions, 19. What would be your future account value (after-tax and after inflation) if you invested $600 each month into a growth mutual fund for 35 years? Assume an average annual rate of return of 7.5 percent. Assume a combined federal and state income tax rate of 28% and an average annual inflation rate of 2.7 percent. O $362419.38 O $449,687.25 O $418,469,15 O $412.758.60 You purchased 74 shares of Z stock in January 2008 for $40 per share. Each year you received a cash dividend of $0.75 per share. In December of 2012. you sold 74 shares of Z for $60 per share. Brokerage fees amounted to 3.0% of the purchase price and 3.0% of the sales proceeds, Use this information to answer the next 5 questions. 20. What would your future account value (after-tax and inflation) if you invest $10,000 each year into a mutual fund for 20 years? Assume an annual rate of return of 11.0 pefcent. Assume an income tax rate of 22% and an inflation rate of 3.5 percent. O $38a.459.62 O $343.534.54 O $327470.02 $488.107.40
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