A four-year-old truck has a present net realizable value of $6,000 and is now expected to have a market value of $1,900 after its remaining three-year life. Its operating disbursements are expected to be $740 per year. An equivalent truck can be leased for $0.35 per mile plus $25 a day for each day the truck is kept. The expected annual utilization is 2,500 miles and 30 days. The effective income tax rate is 45%, the present book value is $4,750, and the depreciation charge is $900 per year if the firm continues to own the truck. If any gains or losses on disposal of the old truck affect taxes at the full 45% rate, and theafter-tax MARR is 5%, find which alternative is better by comparing after-tax equivalent PWs

a. using only the preceding information;

b. using further information that the annual cost of having to operate without a truck is $2,000.

The management of a private investment club has a fund of $250,000 earmarked for investment in stocks. to arrive at an acceptable overall level of risk, the stocks that management is considering have been classified into three categories: high risk (x), medium risk (y), and low risk (z). management estimates that high risk stocks will have a rate of return of 15%/year; medium risk stocks, 10%/year; and low risk stocks, 6%/year. the amount of money invested in low risk stocks is to be twice the sum of the amount invested in stocks of the other two categories. if the investment goal is to have a rate of return of 9% on the total investment, determine how much the club should invest in each type of stock. (assume that all the money available for investment is invested.)

Ursus, inc., is considering a project that would have a five-year life and would require a $1,650,000 investment in equipment. at the end of five years, the project would terminate and the equipment would have no salvage value. the project would provide net operating income each year as follows (ignore income taxes.):

In year 1, the bennetts' 25-year-old daughter, jane, is a full-time student at an out-of-state university but she plans to return home after the school year ends. in previous years, jane has never worked and her parents have always been able to claim her as a dependent. in year 1, a kind neighbor offers to pay for all of jane's educational and living expenses. which of the following statements is most accurate regarding whether jane's parents would be allowed to claim an exemption for jane in year 1 assuming the neighbor pays for all of jane's support? a.no, jane must include her neighbor's gift as income and thus fails the gross income test for a qualifying relative.b.yes, because she is a full-time student and does not provide more than half of her own support, jane is considered her parent's qualifying child.c.no, jane is too old to be considered a qualifying child and fails the support test of a qualifying relative.d.yes, because she is a student, her absence is considered as "temporary." consequently she meets the residence test and is a considered a qualifying child of the bennetts.