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MMLU-Pro / 245 / Mr. Haskell has decided to buy a rental property. The building costs …

Problem

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question

Mr. Haskell has decided to buy a rental property. The building costs 50,000andthelandcosts50,000 and the land costs 30,000. The annual rent income is estimated to be 10,450andtheannualexpense,10,450 and the annual expense, 3,200. Mr. Haskell plans to depreciate the building by the straight line method over 40 years. Mr. Haskell wants to choose the best of three investment plans. Plan A Pay the full 80,000frompersonalaccount.PlanBBorrow80,000 from personal account. Plan B Borrow 30,000 and pay $50,000 from personal account. Rate of interest is 4(1/2)%. Plan C Borrow $60,000 and pay $20,000 from personal account. Rate of interest is 5 (1/4)%. If the tax rate is 40%, which investment plan has the highest rate of return?
Plain-text mathematical notation (without MathML)
Mr. Haskell has decided to buy a rental property. The building costs 50,000andthelandcosts30,000. The annual rent income is estimated to be 10,450andtheannualexpense,3,200. Mr. Haskell plans to depreciate the building by the straight line method over 40 years. Mr. Haskell wants to choose the best of three investment plans. Plan A Pay the full 80,000frompersonalaccount.PlanBBorrow30,000 and pay $50,000 from personal account. Rate of interest is 4(1/2)%. Plan C Borrow $60,000 and pay $20,000 from personal account. Rate of interest is 5 (1/4)%. If the tax rate is 40%, which investment plan has the highest rate of return?
Original LaTeX notation
Mr. Haskell has decided to buy a rental property. The building costs $50,000 and the land costs $30,000. The annual rent income is estimated to be $10,450 and the annual expense, $3,200. Mr. Haskell plans to depreciate the building by the straight line method over 40 years. Mr. Haskell wants to choose the best of three investment plans. Plan A Pay the full $80,000 from personal account. Plan B Borrow $30,000 and pay $50,000 from personal account. Rate of interest is 4(1/2)%. Plan C Borrow $60,000 and pay $20,000 from personal account. Rate of interest is 5 (1/4)%. If the tax rate is 40%, which investment plan has the highest rate of return?

category

business

options

  1. Plan B, if the interest rates drop to 3%
  2. Plan A, if the tax rate decreases to 30%
  3. Plan A
  4. Plan C, assuming rental income increases by 5% annually
  5. Plan C
  6. None of the plans
  7. Plan B
  8. Plan C, if additional tax deductions are available for interest paid
  9. Plan A, with a government grant covering 10% of the initial investment
  10. Plan B, with an additional private investor contributing $10,000

src

stemez-Business

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Source and history

upstream_id / Original problem ID
245
task_id
6294f373-06c0-5210-ab8a-fc970098adf2
task_key
default--test--245
task_revision_id
3
config / split
default / test

Official source

initial import