You own some land at the edge of blacksburg. an individual wants to sign a contract where she rents the land from you for 10 years to operate a golf driving range. she is willing to pay $20,000 per year (at the end of each year). she will then buy the land from you at the end of year 10 for $250,000. alternatively, she is willing to accept a five-year contract, but will only pay $15,000 per year (at the end of each year) and not buy the land at the end of the contract. you suspect that in five years, blacksburg will have grown enough that a developer will buy your land to build new homes. how much does the developer need to pay you at the end of five years to make the shorter contract the better option? assume a 4% interest rate.

Amachine purchased three years ago for $720,000 has a current book value using straight-line depreciation of $400,000: its operating expenses are $60,000 per year. a replacement machine would cost $480,000, have a useful life of nine years, and would require $26,000 per year in operating expenses. it has an expected salvage value of $130,000 after nine years. the current disposal value of the old machine is $170,000: if it is kept 9 more years, its residual value would be $20,000. calculate the total costs in keeping the old machine and purchase a new machine. should the old machine be replaced?

Who is better at multi-tasking? in business, employees are often asked to perform a complex task when their atten-tion is divided (i.e., multi-tasking). human factors (may 2014) published a study designed to determine whether video game players are better than non–video game play-ers at multi-tasking. each in a sample of 60 college stu-dents was classified as a video game player or a non-player. participants entered a street crossing simulator and were asked to cross a busy street at an unsigned intersec-tion. the simulator was designed to have cars traveling at various high rates of speed in both directions. during the crossing, the students also performed a memory task as a distraction. two variables were measured for each student: (1) a street crossing performance score (measured out of 100 points) and (2) a memory task score (measured out of 20 points). the researchers found no differences in either the street crossing performance or memory task score of video game players and non-gamers. “these results,” say the researchers, “suggest that action video game players [and non-gamers] are equally susceptible to the costs of dividing attention in a complex task”

On average, someone with a bachelor's degree is estimated to earn times more than someone with a high school diploma. a)1.2 b)1.4 c)1.6 d)1.8