1. Roshan is a freshman at Florida State University where his tuition is $4,000. Shante, his older sister, is a graduate student at Expensive University, where tuition is $25,000. What is the maximum tax credit Roshan and Shante’s parents can take?
a. $2,000. b. $3,650. c. $3,800. d. $4,500.
2. You are considering implementing a lockbox system for your firm. The system is expected to reduce the collection time by 3 days. On an average day, your firm receives 1,230 checks with an average value of $690 each. The daily interest rate on Treasury bills is 0.02 percent. The bank charge per check would be $.40. What is the net present value of this lockbox arrangement?
$75,768
$66,297
$84,378
$50,799
$86,100