1. Discuss the relationship between rational expectations and random walk theory and how they form the basis of the Efficient Market Hypothesis.
2. A company bought a machine for $111,000. The machine was depriciated using a 5 year MACRS approach. After 5 years, the machine was sold at a salvage value of $96,300. Assuming a tax rate of 32%, what are the net proceeds from the sale of the machine?
3. A company sells 123,799 units per year. Fixed costs per order are $136 and carrying cost is $20 per unit per year. If management uses an EOQ model, how many orders will it place per year?