1. An account was opened with $2,000 10 years ago. Today, the account balance is $2,600. If the account paid interest compounded annually, how much interest on interest was earned?
a) $64.60
b) $67.81
c) $68.33
d) $70.58
e) $71.67
2. A company is considering a new four-year project with an initial investment requirement of $75,000. The equipment will be depreciated straight-line to zero over the life of the project and will be worthless at the end of the project. Sales are estimated at $142,000 with costs of $88,200. The tax rate is 34%. What is the project OCF?
a) $28,394
b) $30,506
c) $37,900
d) 39,394
e) 41,883