Geico is considering expanding an existing plant on a piece of land it already owns. the land was purchased 15 years ago for $325,000 and its current market appraisal is $820,000. a capital budgeting analysis shows that the plant expansion has a net present value of $130,000. the expansion will cost $1.73 million, and the discounted cash inflows are $1.86 million. the expansion cost of $1.73 million does not include any provision for the cost of the land. the manager preparing the analysis argues that the historical cost of the land is a sunk cost, and, since the firm intends to keep the land whether or not the expansion project is accepted, the current appraisal value is irrelevant. should the land be included in the analysis? if so, how?

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Grey company holds an overdue note receivable of $800,000 plus recorded accrued interest of $64,000. the effective interest rate is 8%. as the result of a court-imposed settlement on december 31, year 3, grey agreed to the following restructuring arrangement: reduced the principal obligation to $600,000.forgave the $64,000 accrued interest. extended the maturity date to december 31, year 5.annual interest of $40,000 is to be paid to grey on december 31, year 4 and year 5. the present value of the interest and principal payments to be received by grey company discounted for two years at 8% is $585,734. grey does not elect the fair value option for reporting the debt modification. on december 31, year 3, grey would recognize a valuation allowance for impaired loans of

Fabian got into an accident on his way to work. he had multiple fractures in his leg. his doctor advised strict bed rest for at least three months. fabian is a freelance wildlife photographer who usually works on a contract basis, and this is his primary source of income. before the accident, fabian was planning his finances. which goal of his financial plan would fabian in getting through without pay for the next three months? the goal that requires the creation of a/an would fabian get through the next three months without pay.