Lyft is trying to decide on a supplier for an autonomous veh…

Lyft is trying to decide on a supplier for an autonomous vehicle for its ride-hailing service.  The choise is between a Tesla, a VW and a Lucid.  The VW is the least expensive of the three and has an initial cost of $75,000 and a five-year expected life.  The project will require an investment in working capital of $10,000.  The VW is expeced to generate $65,000 per year in revenue, but have expenses of $28,000.  The VW will be depreciated straight-line to a zero salvage value over 5 years, but it is expected to actually be sold for $15,000 at that time.  Lyft’s tax rate is 25% and the project’s required rate of return is 15%.  What is the EAA/EAC of the VW? 

 In 2018 Cheryl bought a home for $450,000. She put $100,000…

 In 2018 Cheryl bought a home for $450,000. She put $100,000 down in cash and borrowed $350,000 from a bank. In 2020, the fair-market-value of the rose to $500,000. The amount she still owes on the first loan is $350,000. In 2020 Cheryl wants to borrow against her equity in the home to finance a new car purchase. What is the maximum she can borrow as an equity loan on the property and deduct all the interest on that equity loan?