provide solutions111 War and Economic Recovery Imperial forces have decided to attack Alderaan (I hope you are also a fan of Star Wars)

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War and Economic Recovery
Imperial forces have decided to attack Alderaan (I hope you are also a fan of
Star Wars). The attack destroyed most of the capital own by the Rebel Alliance, the
Secretary of the Cabinet, Senator Bail Organa, have requested your advice in order to
restore the Galactic Republic.
1. Use the Solow-Swan Model to explain the Cabinet the effects of the destruction
of capital on output, consumption, real wages, and real rental rates.
2. Using the Solow-Swan Diagram explain to the Cabinet why the Rebel Alliance
is expected to growth faster after the destruction capital.
3. Give one economic explanation for why growth could be even faster after the
destruction of capital than the basic model predicts. Use 

question is okay answer

John and Kay are ages 56 and 54 respectively.  They currently have $1,000,000 in total saved in their RRSPs and they are currently adding a combined amount of $1500 per month to them.  They make their contributions at the beginning of each month, and they plan to continue to do this until John reaches the age of 65 which is when they both will retire.  Assume they are earning a 6% rate of return on their investments and that they compound 4 times a year when they receive dividends on their investments.  Note: disregard taxes and inflation.

 

a. How much money will they have in their combined RRSPs at retirement?

b. If John and Kay begin taking retirement income from their investments when John retires, how much pre-tax income will they receive a month, assuming Kay lives until age 90 and assuming they spend it all by the time she passes?  Assume they take their income at the beginning of the month, they receive a 5% rate of return, compounded quarterly, and once again, disregard taxes and inflation.

 

Ralph and Mary-Beth are first time home buyers in 2020. On October 1st , 2020, hey both withdraw $25,000 from their respective RRSP's to make a down payment on their home.

 

a. When must they begin repaying amount borrowed from their RRSP?

 

b. How much will the first repayment be in total for both Ralph and Mary-Beth

 

c. Assuming that Ralph and Marry are truly first-time home buyers, under what circumstances would withdrawal under the home buyer's plan be disallowed?

 

Richie turns 61 this year and will be entitled to CPP retirement pension of $1,100 per month. He decides to wait until the age 68 to begin collecting his CPP.

 

a. How much will his monthly pension benefit be?

 

b. What factors should Richie consider when deciding when the appropriate time is to take CPP.

 

a. Compare and Contrast a Defined Benefit Pension Plan vs. a Defined Contribution Pension plan.

 

b. Which one is better?  Why?

 

 

1) Eddie, a firefighter joined his employer's defined benefit pension plan at age 23.  If the plan's qualifying factor is 75, what is the earliest age at which Eddie can retire with an unreduced pension?

 

a. 49

b. 53

c. 60

d. 50

 

2) George will turn 71 this year on the same date that his spouse Gina turns 65.  If George continues to have the required earned income, after what date may George no longer make contributions into a spousal RRSP?

 

a. February 28 the year following the year Gina turns 71.

b. December 31, this year.

c. Gina's 71st birthday.

d. December 31, the year Gina turns 71

 

3) David and his wife Beatrice have a disabled adult son, Cole, age 21.  Last year, David retired after a 30-year career with RPG Inc.  David was a member of the firm's defined contribution pension plan (DCPP), and upon retirement, purchased a joint life annuity for $485,000.  The annuity was structured with this wife, Beatrice, named as co-annuitant.  The annuity has no guarantee period and provides a retirement benefit of $3,000 per month with a 100% survivor option.  Last week, David died in a car accident.  What of the following statements correctly describes the outcome in this situation?

 

a. Beatrice's annuity payments will cease if she gets re-married.

b. David's DCPP balance can be rolled into Beatrice's RRSP on a tax-deferred basis.

c. The remaining balance of the $485,000 can be rolled into an RDSP for Cole on a tax-deferred basis.

d. Beatrice will continue to receive $3,000 per month for the rest of her life.

 

4) Hank's unused RRSP deduction limit at the end of last year was $6,000, while his new contribution room for this year was $8,975.  In December this year, Hank made a $22,000 RRSP contribution.  Assuming Hank's income was $30,000 this year, what financial penalty will Hank incur for excess contributions?

 

a. $150.75

b. $25.13

c. $50.25

d. $70.25

 

5) Linda has just died. She was a member of a pooled registered pension plan (PRPP), and had named her brother, Ken, as beneficiary on the plan.  At the time of death, Linda's PRPP had a balance of $330,000.  Linda's will indicate that she wanted any taxes owing on the PRPP to be paid from the assets in the plan itself.  Your client, Ken, age 60, is now wondering about any potential tax consequences and what he must do to receive the assets from Linda's plan. Which statement properly describes this situation?

 

a. The estate cannot use the assets in a registered pension plan to cover the tax liability on the de-registration of the fund's assets.

b. $330,000 from the PRPP is included in Linda's final tax return and Ken can receive net proceeds as cash.

c. The $330,000 can be rolled over on a tax-deferred basis into Ken's RRSP.

d. Ken must transfer the $330,000 into a locked-in plan such as a LIRA, LIF, or LRIF.

 

6) Which of the following is true about inflation?

 

a. Future inflation rates are difficult to predict or even estimate.

b. It will always go down in the future.

c. Inflation is not a big concern in retirement planning.

d. Real amounts are amounts that include inflation.

 

7) Which of the following is true for GIS.

 

a. It is not reported on your tax return and is not taxable income.

b. It is not reported on your tax return and is taxable income.

c. It is reported on your tax return and is not taxable income.

d. It is reported on your tax return and is taxable income.

 

8) Sandra is planning on retiring at the end of this year.  When she does, she will have 15 years of participation in her employer's defined benefit pension plan.  The pension plan will provide a benefit based on 1.5% of her best earnings over 3 consecutive years.  Sandra's earnings during the past 6 years are the highest throughout her career.

 

Calculate Sandra's annual pension, considering the following earnings history:

 

5 years ago: $48,000

4 years ago: $51,000

3 years ago: $52,000

2 years ago: $50,000

 

Previous year: $51,000

This year:  $53,000

 

 

a. $11,437.50

b. $11,362.50

c. $11,475.00

d. $11,550.00

 

9) Andrew was recently diagnosed with prostate cancer.  Andrew is almost 65, and as a result of this health scare has decided to retire.  Andrew's employer has given him a number of options on how he may elect to receive his pension income.  Andrew has no children, but he is married and wants to ensure that he provides for his wife during her lifetime.  Based on Andrew's objective, what is the best option for him?

 

a. Life income with a guarantee period.

b. Joint and survivor pension

c. Life income pension.

d. Joint and survivor pension with a guarantee period.

 

10) Sanjay is a member of his company's defined benefit pension plans.  When considering contributions to DB plans, identify the statements that are true:

 

1.The employer's contribution amount is calculated as a percentage of the plan member's earnings.

2.The employee is ultimately responsible for the plan's solvency.

3.Employer contributions into the plan are a tax-deductible business expense if the contribution calculation adheres to CRA's prescribed guidelines.

4.The annual benefit entitlement is restricted by the maximum pension rule.

 

 

a. 3 and 4

b. 1 and 2

c. 1 and 3

d. 2 and 4

 

11) From the following summary of payments that Carly received this year, calculate her current year's earned income:

 

$29,000 Employment income

$10,000 Spousal income

$6,000 in retiring allowance

$4,500 in taxable capital gains

$2,000 interest income on non-registered savings

 

a. $47,000

b. $29,500

c. $41,000

d. $39,000

 

12) Annie's salary is $50,000. Using a contribution rate of 5.10%with a YMPE of $57,400 her CPP contribution is?

 

a. 2,550.00

b. 2,748.90

c. 2371.50

d. 2728.50

 

13) In his RRSP, Donald purchased on oil futures contract for $25,000. Later that year, after holding he contract for 4 months, Donald sold it for $27,000. He received no income from the futures contract during the holding period. Which of the following would result?

 

1. Donald must include $25,000 in his income.

2. Donald must include $27,000 in his income.

3. Donald is subject to a $1,000 penalty.

4. Donald is subject to a $1,080 penalty.

 

a. 2 and 4

b. 1 and 4

c. 2 and 3

d. 1 and 3

 

14) Marty and Steve have been me-sex partners for 30 years. Marty can receive CPP retirement benefits of $3,000 a year after working for 45 years while Steve can receive $10,000 a year after working for 50 years. After pension sharing, how much will Marty receive e first year?

 

a. $0

b. $5,000

c. $9,000

d. $7,000

 

15) Betty was able to join her company's defined contribution pension plan this past month because she became eligible to do so. Identify which of the following statements are true with respect to employer's contribution into the pension plan on betty's behalf:

 

1. The employer's contributions will be considered a taxable benefit to Betty.

2. The employer's contributions will not be considered a taxable benefit to betty.

3. The employer's contributions are a tax-deductible expense to business.

4. The employer's contributions are not a tax-deductible expense to business.

 

a. 2 and 3

b. 1 and 3

c. 2 and 4

d. 1 and 4

 

16) Geoff wants to use RRSP to contribute to his TFSA. In his RRSP, he has a Canadian Equity Fund that he purchased last year for $8,000, and now has a current fair market value (FMV) of $10,000. Geoff would like to transfer his TFSA. Geoff is in a 35% marginal tax rate (MTR) and has an RRSP contribution limit of $10,000. Which statement correctly describes this situation?

 

a. Geoff's RRSP contribution limit will be increased by $15,000.

b. Geoff can complete the transfer as a tax-deferred rollover.

c. Geoff must pay a withholding tax of $2,000

d. Geoff will get a net deduction of $3,500 n the transaction.

 

17) Jacob is a member of a defined benefit pension plan. He has pensionable earnings of $75,000 and earns an annual pension accrual of 1.5% of pensionable earnings. Using this information, calculate Jacob's Pension Adjustment (PA).

a. $13,500

b. $9,525

c. $10,125

d. $1,125

 

18) Alex as RRSP income of $67,000, CPP of $11,500 and $6,400 of OAS a year. He also receives interest income of $8,700 each year. If the OAS threshold is $68,000. His OAS after the claw back is:

 

a. $3,520

b. $2,965

c. $3,925

d. $2,560