1. Anna manages a store. Store policy is to apply a 25% keystone markup on every product for sale. All other costs are fixed. With $4500 in fixed costs, and $2600 in net income, what is her sales figure for the month?
2. A firm with a 40 percent marginal tax rate has a capital structure of $60,000 in debt and $140,000 in equity. What is the firm’s weighted cost of capital if the marginal pretax cost of debt is 10 percent, and the cost of equity is 14 percent? Show work.