1. Cameron Industries is purchasing a new chemical vapor depositor in order to make silicon chips. It will cost $6 million to buy the machine and $10,000 to have it delivered and installed. The machine is expected to have a working life of six years. Sales are expected to be $3,000,000 per year. If straight-line depreciation is used, what are the yearly depreciation expenses in this case?
A) 1,000,000
B) 1,500,000
C) 1,001,667
D) 1,501,667
2. Which of the following statment is false?
A. Common stockholders own the firm and are among the last to be paid in the event of bankruptcy.
B. Preferred stockholders are considered part of the firm's equity, but they receive similar benefits as creditors (e.g., they receive dividends in fixed amounts.)
C. Preferred stockholders are more protected from risk than common stockholders.
D. Commond stockholders have an upper limit on their dividends.