1. An eight year project involves equipment costing $2,290,000 that will be depreciated using the three-year MACRS schedule. If the estimated pre-tax salvage value for the equipment at the end of the project's life is $435,100, what is the after-tax salvage value for the equipment? Assume a marginal tax rate of 34 percent.
2. If you deposit $3,000 in an account paying 6% interest compounded semiannually and left it for five years what effective annual interest rate would you earn?