1. Amy's Ice Cream Shop is considering the purchase of a $7500 ice cream maker. The ice cream maker has an economic life of five years and will be fully depreciated by the straight-line method. The machine will produce 1,300 cones per year, with each costing $2.15 to make and priced at $5.25. Assume that the discount rate is 14% and the tax rate is 34%. What is the NPV of the project? Should the company make the purchase?
2. Based on the current and expected future of the Social Security system:
What challenges face the System?
Can you expect to receive the level of benefits that current retirees recieve? Why or why not?