1. In which of the following cases is an overdraft created in a drawer's account?
A. when a properly payable check issued by the drawer is presented for payment, but the drawer's account does not have sufficient funds in it
B. when the drawer issued a stop-payment order for a check, but the bank still goes ahead and pays the holder of the check
C. when the bank pays the holder of a check in which the amount payable is altered to indicate a higher amount than was originally intended
D. when the payee presents the check after six months from the date of the check and the bank still pays the holder
2. A machine has a first cost of $50,000. Its market value declines by 20% annually. The operating and maintenance costs start at $2500 per year and increase $2000 per year. The firm’s MARR is 9%. Determine its economic service life.
4 years
3 years
2 years
5 years
6 years
Show your method, approach, calculations to the best of your ability.