In year 1, abby purchased a new home for $200,000 by making a down payment of $150,000 and financing the remaining $50,000 with a loan, secured by the residence, at 6 percent. as of january 1, year 4 the outstanding balance on the loan was $40,000. on january 1, year 4, when her home was worth $300,000, abby refinanced the home by taking out a $120,000 mortgage at 5 percent. with the loan proceeds, she paid off the $40,000 balance of the existing mortgage and used the remaining $80,000 for purposes unrelated to the home. during year 4, she made interest-only payments on the new loan of $6,000. what amount of the $6,000 interest expense on the new loan can abby deduct in year 4 on the new mortgage as home related interest expense?

When earning simple interest on money you invest, which statement is true? a. as time goes on and your bank account grows, you earn more interest. b. as time goes on and your bank account grows, you earn less interest. c. as time goes on and your bank account grows, you earn the same amount of interest. d. as time goes on and your bank account grows, you stop earning interest.

You are the manager in charge of global operations at bankglobal – a large commercial bank that operates in a number of countries around the world. you must decide whether or not to launch a new advertising campaign in the u.s. market. your accounting department has provided the accompanying statement, which summarizes the financial impact of the advertising campaign on u.s. operations. in addition, you recently received a call from a colleague in charge of foreign operations, and she indicated that her unit would lose $8 million if the u.s. advertising campaign were launched. your goal is to maximize bankglobal’s value. should you launch the new campaign? explain. pre-advertising campaign post-advertising campaign total revenues $18,610,900 $31,980,200 variable cost tv airtime 5,750,350 8,610,400 ad development labor 1,960,580 3,102,450 total variable costs 7,710,930 11,712,850 direct fixed cost depreciation – computer equipment 1,500,000 1,500,000 total direct fixed cost 1,500,000 1,500,000 indirect fixed cost managerial salaries 8,458,100 8,458,100 office supplies 2,003,500 2,003,500 total indirect fixed cost $10,461,600 $10,461,600

mark, a civil engineer, entered into a contract with david. as per the contract, mark agreed to design and build a house for david for a specified fee. mark provided david with an estimation of the total cost and the contract was mutually agreed upon. however, during construction, when mark increased the price due to a miscalculation on his part, david refused to pay the amount. this scenario is an example of a mistake.