Solve the following problems:
1. Suppose you buy an asset for $1,000,000. If it costs $100,000 for shipping and installation, how much is your investment outlay?
2. If an investment is expected to increase revenues by $100,000 per year for five years, with no effect on expenses or working capital, what is the operating cash flow per year if depreciation is $20,000 each year and the tax rate is:
a. 20%?
b. 30%?
c. 40%?
d. 50%?