1. A firm has revenue of $50,000, the cost of goods sold is $23,000, other expenses (selling and administration) are $14,000 and depreciation is $5,000. The firm s tax rate is 33%. What is the operating cash flow?
a. $ 5,360
b. $ 8,000
c. $ 10,360
d. $ 13,000
e. None of the above
2. How much more is a perpetuity of $1,000 worth than an annuity of the same amount for 20 years? Assume a 10% interest rate and cash flows at end of period. (round to the nearest cent)
a. $ 297.29
b. $1,486.44
c. $1,635.08
d. $2,000.00
e. None of the above