1. Tracy is single and has an adjusted gross income of $45,800 in 2015. She also has the following items:
Unreimbursed medical expenses - 4,163
State income tax - 2,123
Interest expense (1st mortgage) - 3,348
Interese expense (2nd mortgage) - 1,320
Real estate tax - 954
Interest expense - car loan - 505
Interest expense - credit card - 1,130
Gifts to charity - 402
How much can Tracy claim as itemized deductions?
2. You have two capital projects projected below. Projects X and Y have the following costs and projected cash flows.
The cost of capital for both projects is 12%.
Project X Project Y
0 ($10,000) ($10,000)
1 $6,500 $3,500
2 $3,000 $3,500
3 $3,000 $3,500
4 $1,000 $3,500
Calculate the MIRR of each project.