If the economy booms, RTF, Inc., stock is expected to return 12 percent. If the economy goes into a recessionary period, then RTF is expected to only return 4 percent. The probability of a boom is 76 percent while the probability of a recession is 24 percent. What is the variance of the returns on RTF, Inc., stock?

Xinhong company is considering replacing one of its manufacturing machines. the machine has a book value of $39,000 and a remaining useful life of 5 years, at which time its salvage value will be zero. it has a current market value of $49,000. variable manufacturing costs are $33,300 per year for this machine. information on two alternative replacement machines follows. alternative a alternative b cost $ 115,000 $ 117,000 variable manufacturing costs per year 22,900 10,100 1. calculate the total change in net income if alternative a and b is adopted. 2. should xinhong keep or replace its manufacturing machine