Allegience Insurance Company’s management is considering an advertising program that would require an initial expenditure of $165,500 and bring in additional sales over the next five years. The projected additional sales revenue in year 1 is $75,000, with associated expenses of $25,000. The additional sales revenue and expenses from the advertising program are projected to increase by 10 percent each year. Allegience’s tax rate is 30 percent. (Hint: The $165,500 advertising cost is an expense.)

Required:

Compute the payback period for the advertising program.

Calculate the advertising program’s net present value, assuming an after-tax hurdle rate of 10 percent.

An employer who is considering hiring eva has asked donna, eva’s former supervisor, for a report on eva. in truth, eva’s work for donna has been only average. however, eva is donna’s friend, and donna knows that eva probably will not get the job if she says anything negative about eva, and donna knows that eva desperately needs the job. further, donna knows that if the situation were reversed, she would not want eva to mention her deficiencies. nevertheless, it has been donna’s policy to reveal the deficiencies of employees when she has been asked for references by employers, and she knows that some of eva’s faults may be bothersome to this particular employer. finally, this employer has leveled with donna in the past when donna has asked for a report on people who have worked for him. should donna reveal deficiencies in eva’s past performance? (remember to use one of the three moral theories acceptable for this test to solve this dilemma. any discussion of any personal opinion, religious perspective, or theory other than the moral theories acceptable for this test will result in a score of "0" for this question.)

Lambert manufacturing has $100,000 to invest in either project a or project b. the following data are available on these projects (ignore income taxes.): project a project b cost of equipment needed now $100,000 $60,000 working capital investment needed now - $40,000 annual cash operating inflows $40,000 $35,000 salvage value of equipment in 6 years $10,000 - both projects will have a useful life of 6 years and the total cost approach to net present value analysis. at the end of 6 years, the working capital investment will be released for use elsewhere. lambert's required rate of return is 14%. the net present value of project b is:

Under t, the point (0,2) gets mapped to (3,0). t-1 (x,y) →