You want to buy a house within 3 years, and you are currently saving for the down payment. You plan to save $9,000 at the end of the first year, and you anticipate that your annual savings will increase by 5% annually thereafter. Your expected annual return is 8%. How much will you have for a down payment at the end of Year 3?
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Hampton Industries had $39,000 in cash at year-end 2015 and$11,000 in cash at year-end 2016. The firm invested in property, plant, and equipment totaling $210,000. Cash flow from financing activities totaled$120,000. a. What was the cash flow from operating activities? b. If accruals increased by $15,000, receivables and inventories increased by$50,000, and depreciation and amortization totaled $25,000, what was the firm’s net income?
Jan sold her house on December 31 and took a $10,000 mortgage as part of the payment. The 10-year mortgage has a 10% nominal interest rate, but it calls for semiannual payments beginning next June 30. Next year Jan must report on Schedule B of her IRS Form 1040 the amount of interest that was included in the two payments she received during the year. a. What is the dollar amount of each payment Jan receives? b. How much interest was included in the first payment? How much repayment of principal was included? How do these values change for the second payment? c. How much interest must Jan report on Schedule B for the first year? Will her interest income be the same next year? d. If the payments are constant, why does the amount of interest income change over time?