Alex, who is single, conducts an activity in 2016 that is appropriately classified as a hobby. the activity produces the following revenues and expenses:

revenue $18,000
property taxes 3,000
materials and supplies 4,500
utilities 2,000
advertising 5,000
insurance 750
depreciation 4,000

without regard to this activity, alex’s agi is $42,000. determine the amount of income alex must report, the amount of the expenses he is permitted to deduct, and his taxable income.

Haley photocopying purchases a paper from an out-of-state vendor. average weekly demand for paper is 150 cartons per week for which haley pays $15 per carton. in bound shipments from the vendor average 1000 cartoons with an average lead time of 3 weeks. haley operates 52 weeks per year; it carries a 4-week supply of inventory as safety stock and no anticipation inventory. the vendor has recently announced that they will be building a faculty near haley photocopying that will reduce lead time to one week. further, they will be able to reduce shipments to 200 cartons. haley believes that they will be able to reduce safety stock to a 1-week supply. what impact will these changes make to haley’s average inventory level and its average aggregated inventory value?