1. The returns of Tiger Inc. stock over the last four years were 13 percent; 17 percent; 0 percent; and 18 percent. Determine the 68 percent probability range, if the stock's returns are normally distributed.
A. -14.11 percent to 37.23 percent
B. 1.78 percent to 19.27 percent
C. 3.71 percent to 20.29 percent
D. -4.58 percent to 28.58 percent
2. Precision Tool is trying to decide whether to lease or buy some new equipment for its tool and die operations. The equipment costs $56,000, has a 3-year life and will be worthless after the 3 years. The pre-tax cost of borrowed funds is 6 percent and the tax rate is 33 percent. The equipment can be leased for $19,500 a year. What is the net advantage to leasing? (Do not round intermediate calculations.)
$282
$3,023
$2,669
$1,403
$-1,985