Mike and Betty Gordon are both 66 years old. Mike will retire January 1 from his position as a professor of radical social thought. He will be eligible for a pension of $50,000 p. a., indixed to the Consumer Price Index. He will receive maximum CPP, and is already receiving full OAS. He has $200,000 invested in ethical mutual funds (adjusted cost base $150,000). Assume Mike will receive about $5,000 in dividends from the mutual fund and $2,000 in realized capital gains. Betty has no pension but is receiving full OAS. Betty has $100,000 in a spousal RRSP, invested in Canadian Trust GICs. They jointly own a condominium in Toronto worth $250,000 (no mortgage). Their planned donations for this year include $2,000 to registered charities, and $200 to a registered federal political party. They have two children. One of the children is married, with three children of his own. a) How should they structure their retirement planning, both now and for the rest of their retirement? There are some decisions they must make now, nd others that will have to be made within the next six years.

b) What will be their marginal and average income tax rates? Assume that they take no payments from the RRSPs into income in this year and do not sell any mutual fund units. Other than that assumption, assume that you have done the best job of planning in (a). To do this question, you must calculate taxable income for each one of them.

Show the changes to the t-accounts for the federal reserve and for commercial banks when the federal reserve buys $50 million in u.s. treasury bills. if the public holds a fixed amount of currency (so that all loans create an equal amount of deposits in the banking system), the minimum reserve ratio is 10%, and banks hold no excess reserves, by how much will deposits in the commercial banks change? by how much will the money supply change? show the final changes to the t-account for commercial banks when the money supply changes by this amount.

Cardinal company is considering a project that would require a $2,725,000 investment in equipment with a useful life of five years. at the end of five years, the project would terminate and the equipment would be sold for its salvage value of $400,000. the company’s discount rate is 14%. the project would provide net operating income each year as follows: sales $2,867,000 variable expenses 1,125,000 contribution margin 1,742,000 fixed expenses: advertising, salaries, and other fixed out-of-pocket costs $706,000 depreciation 465,000 total fixed expenses 1,171,000 net operating income $571,000 1. which item(s) in the income statement shown above will not affect cash flows? (you may select more than one answer. single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. any boxes left with a question mark will be automatically graded as incorrect.) (a)sales (b)variable expenses (c) advertising, salaries, and other fixed out-of-pocket costs expenses (d) depreciation expense 2. what are the project’s annual net cash inflows? 3.what is the present value of the project’s annual net cash inflows? (use the appropriate table to determine the discount factor(s) and final answer to the nearest dollar amount.) 4.what is the present value of the equipment’s salvage value at the end of five years? (use the appropriate table to determine the discount factor(s) and final answer to the nearest dollar amount.) 5.what is the project’s net present value? (use the appropriate table to determine the discount factor(s) and final answer to the nearest dollar amount.)

Garfield corporation is considering building a new plant in canada. it predicts sales at the new plant to be 50,000 units at $5.00/unit. below is a listing of estimated expenses. category total annual expenses % of annual expense that are fixed materials $50,000 10% labor $90,000 20% overhead $40,000 30% marketing/admin $20,000 50% a canadian firm was contracted to sell the product and will receive a commission of 10% of the sales price. no u.s. home office expenses will be allocated to the new facility. the contribution margin ratio for garfield corporation is