Leo Is a Welfare Recipient Who Qualifies for Two Means-Tested

question 65

Multiple Choice

Leo is a welfare recipient who qualifies for two means-tested cash benefits.If he does not earn any income,he receives $225 from each benefit.For each dollar he earns (which his employer is required to report to the welfare agency) ,each benefit is reduced by 75 cents until the benefit equals zero.
If Leo earns $150 he will receive total benefits in the amount of

• A)$75.
• B)$325.
• C)$225.
• D)0.

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Definitions:

Salvage Value

The estimated monetary value of an asset at the cessation of its useful duration.

Labor Costs

Expenses related to compensating employees for their work, including wages, salaries, and benefits.

Payback Period

The time it takes for an investment to generate cash flows sufficient to recover the initial cost of the investment.

Simple Rate of Return

Is the ratio of net annual cost savings to the initial investment, used to evaluate investment efficiency.