Hector's Wealth Is Zero,he Expects to Work for Another 45

question 48

Multiple Choice

Hector's wealth is zero,he expects to work for another 45 years at a constant salary of ?$80 000 and live for another 60 years.Yearly taxes are $20 000,and Hector received a one-time tax rebate of $5000 during his first year of work.Shortly after the tax rebate is announced,the government unexpectedly announces that the one-time tax rebate will actually become a permanent tax reduction.If Hector completely smooths consumption over his lifetime,his annual consumption will increase by ________ due to the tax rebate becoming permanent in the following year.

• A) $2733.33
• B) $3666.67
• C) $3750.00
• D) $5000.00

Understand operating cycle calculations to manage cash flow effectively.

Evaluate the equity multiplier to understand the level of financial leverage.

Determine the average collection period to assess the effectiveness of credit policies.

Interpret inventory turnover to assess inventory management efficiency.

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Definitions:

Steam Engine

is a heat engine that performs mechanical work using steam as its working fluid, playing a pivotal role in the Industrial Revolution by powering factories, locomotives, and ships.

Major Forces

Fundamental or powerful factors that influence or shape the course of events in society, the economy, or the natural world.

Urgent Social Need

A critical and immediate requirement within a society that necessitates prompt action for the welfare of its members.

Big Science

Large-scale scientific research involving extensive financial investment, often funded by governments and focusing on significant, complex problems.