1. Jackson plans to save $12,000 per year in his retirement account for 6 years. His first contribution to his retirement account is expected later today. Jackson plans to retire in 6 years. In retirement, Jackson plans to make equal withdrawals for 3 years. How much can Jackson expect to withdraw each year in retirement if he expects to earn 6.7 percent in his retirement account, he makes annual withdrawals in retirement, and his first withdrawal is made exactly 1 year after he retires?
A. $32,285 (plus or minus $10)
B. $30,258 (plus or minus $10)
C. $34,448 (plus or minus $10)
D. $41,609 (plus or minus $10)
E. None of the above is within $10 of the correct answer
2. Five years ago, Jackson invested $18,900. In 3 years from today, he expects to have $28,700. If Jackson expects to earn the same annual rate of return after 3 years from today as the annual rate implied from the past and expected values given in the problem, then in how many years from today does he expect to have exactly $37,100?
A. A number equal to or greater than 3.80 but less than 5.20
B. A number equal to or greater than 5.20 but less than 6.50
C. A number equal to or greater than 6.50 but less than 7.80
D. A number equal to or greater than 7.80 but less than 9.10
E. A number less than 3.80 or an amount equal to or greater than 9.10
3. New England Singers currently owns 7 opera houses and is considering the Florida project, which is a project that would involve starting and building an 8th opera house, which would be in Florida. With the Florida project, each of the opera houses owned by the company would be allocated annual marketing costs of $8,700 for internal accounting. When determining the relevant net income for the Florida project, relevant marketing costs of $6,500 would be included in the analysis of the Florida project. If each of the 7 opera houses that are currently owned by the company would be allocated the same annual marketing costs for internal accounting, then what marketing costs would be allocated to each opera house for internal accounting without the Florida project?
A. An amount less than $2,100 or an amount that is equal to or greater than $10,900 B. An amount equal to or greater than $2,100 but less than $5,100
C. An amount equal to or greater than $5,100 but less than $7,100
D. An amount equal to or greater than $7,100 but less than $9,100
E. An amount equal to or greater than $9,100 but less than $10,900