1. A stock produced total returns of 15%, -12%, 20%, and 36% over the past four years, respectively. What is the geometric average return?
a. 13.36%
b. 12.44%
c. 11.30%
d. 2.04%
e. 0.83%
2. ABC Products needs to replace its rawhide tanning and molding equipment. It can be used for five years and will have no salvage value. The equipment costs $930,000. The firm can lease it for $245,000 a year, or it can borrow the money to purchase the equipment at 5%. The firm's tax rate is 40%. The CCA rate is 20% (Class 8). What is the present value of the depreciation tax shield?
a. 301,242
b. $336,959
c. $343,885
d. $318,767
e. $351,193