1. Leo is 34. He contributed $3000 to Roth IRA in 2013 and $2000 in 2014. In 2016 he withdrew entire balance which had grown to $5466. How much of withdrawal is taxable and how much subject to penalthough?

2. Suppose the Japanese yen exchange rate is ¥110 = US$1 and the U.S. dollar exchange rate is £0.8 = US$1. What is the cross-rate in terms of ¥ per £?

a. ¥88 per £

b. ¥120 per £

c. ¥140 per £

d. ¥137.5 per £

e. None of the above

3. Project A has an initial cost of $50,000 and provides cash inflows of $21,000 a year for three years. Project B has an initial cost of $45,000 and produces cash inflows of $19,000 a year for year three years. The projects are mutually exclusive. Which project(s) should you accept if the discount rate is 11.7 percent? What if the discount rate is 13.5 percent?

A. Accept B as it always has the higher NPV.

B. Accept B at 11.7 percent and neither at 13.5 percent.

C. Accept A at 11.7 percent and B at 13.5 percent.

D. Accept A as it always has the higher NPV.

E. Accept B at .11.7 percent and A at 13.5 percent.