1. A project requires $392,482 of equipment that is classified as 7-year property. What is the book value of this asset at the end of year 3 given the following MACRS depreciation allowances, starting with year one: 14.29, 24.49, 17.49, 12.49, 8.93, 8.92, 8.93, and 4.46 percent?
2. ABC, Inc. is considering the purchase of new equipment. The annual sales are expected to be $747,731, the annual variable costs are expected to be $49,280, the annual fixed costs are expected to be $50,027, the annual depreciation expenses are expected to be $40,997. Assuming a tax rate of 37.4%, what is the operating cash flow?