Mary Paid $456 for an Annual Contract to an ISP

question 51

Multiple Choice

Mary paid $456 for an annual contract to an ISP on July 1, 2012. She terminated her contract with the ISP on March 8. The contract requires to refund a prorated amount to the exact number of days remaining in the period of coverage. A $50 service charge is then deducted. What refund will Mary receive?

• A) $142.42
• B) $92.42
• C) $54.94
• D) $50
• E) $0

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Definitions:

After-Tax Discount Rate

The rate of return on an investment after accounting for taxes, used in net present value calculations to determine the value of future cash flows.

Income Tax Rate

The rate at which income is taxed for individuals or corporations.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in an equal yearly amount.

Renovation Cost

The total expenses incurred during the process of improving or updating a property.