Answer:
The right answer is option (C).
Explanation:
Earned income can be defined as the income of a person which he earns by working and efforts.
Hence according to the question, the most appropriate answer is option (C) because interest earned from a bank account is not the result of any personal efforts and hence it is not considered as earned income for EIC.
While the other options are wrong because of the following reasons:
- Wages can be defined as the income a person gets after working for some company, hence it is considered as the earned income.
- Tips are also an outcome of personal efforts to make clients happy and hence it also considered as the earned income.
- Self-employed income can be defined as the income a person gets for his work as a freelancer and hence it also considered as the earned income.
Answer:
Payback is 5 years. The company should purchase the plant as payback occurs before the replacement date.
Explanation:
If a project has equal annual cash-flows, the payback period can be calculated using the formula:
As such:
McAlister Products, will consider this machine profitable, and worth investing in if payback occurs before the investment's replacement date. In other words, the company should purchase this plant if payback period is less than 7 years. From the calculation above, payback period is 5 years which is less than 7 years. The company should thus purchase this plant.
consumer to share liability with a company.
<span>The range of values for the project cost estimate will become more precise. As in, there will be a better and more clear idea of how much the project costs will be, so the estimate will be more accurate.</span>