1. If a project is accepted revenues are expected to increase by $5,000 and operating expenditures are expected to decrease by $2,000 per year. If this company accepts the project depreciation will be $10,000 a year. The company has a tax rate of 40%, calculate the annual cash flow.
Round to 5 decimals.
2. Last year Janet purchased a $1,000 face value corporate bond with an 8% annual coupon rate and 15-year maturity. At the time of purchase, it had an expected yield of 10.45%. If Janet oldthe bond today for $820.17, what rate of return would she earned for the past year?