In year 1, kris 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 his home was worth $300,000, kris refinanced the home by taking out a $150,000 mortgage at 5 percent. with the loan proceeds, he paid off the $40,000 balance of the existing mortgage and used the remainder for purposes unrelated to the home. during year 4, he made interest only payments on the new loan of $7,500. what amount of the $7,500 interest expense on the new loan can kris deduct in year 4 on the new mortgage as home related interest expense?

a. $2,000
b. $5,000
c. $7,000
d. $7,500

The maximum amount of money that a consumer can charge on a credit card is called the

Select the correct answer the smith family adopted a child. the adoption procedure took about three months, and the family incurred various expenses. will the smiths receive and financial benefit for the taxable year? a) they will not receive any financial benefit for adopting the child b) their income tax component will decrease c) they will receive childcare grants d) they will receive a tax credit for the cost borne for adopting the child e) they will receive several tax deductions

Suppose that xtel currently is selling at $40 per share. you buy 500 shares using $15,000 of your own money, borrowing the remainder of the purchase price from your broker. the rate on the margin loan is 8%. a. what is the percentage increase in the net worth of your brokerage account if the price of xtel immediately changes to (a) $44; (b) $40; (c) $36? (leave no cells blank - be certain to enter "0" wherever required. negative values should be indicated by a minus sign. round your answers to 2 decimal places.) b. if the maintenance margin is 25%, how low can xtel’s price fall before you get a margin call? (round your answer to 2 decimal places.) c. how would your answer to requirement 2 would change if you had financed the initial purchase with only $10,000 of your own money? (round your answer to 2 decimal places.) d. what is the rate of return on your margined position (assuming again that you invest $15,000 of your own money) if xtel is selling after one year at (a) $44; (b) $40; (c) $36? (negative values should be indicated by a minus sign. round your answers to 2 decimal places.) e. continue to assume that a year has passed. how low can xtel’s price fall before you get a margin call? (round your answer to 2 decimal places.)