1. A proposed new investment has projected sales of $859114. Variable costs are 58 percent of sales, and fixed costs are $181208; depreciation is $73478. What is the projected net income assuming a tax rate of 28 percent?
2. Consider an asset that costs $595197 and is depreciated straight-line to zero over its seven-year tax life. The asset is to be used in a five-year project; at the end of the project, the asset can be sold for $152603. If the relevant tax rate is 35 percent, what is the aftertax cash flow from the sale of this asset?