1. Special tools at a cost of $15,000 have been bought for the manufacture of some critical parts in a plastic company. It is estimated that the salvage value at the end of the useful life is $1,000. The second- year MACRS depreciation is equal to _______?
A) $4,667
B) $6,668
C) $6,223
D) $5,000
2. A stock has an expected return of 16 percent, its beta is 0.4, and the risk-free rate is 8.8 percent. What must the expected return on the market be?
a) 27.87%
b) 26.80%
c) 25.46%
d) 28.14%
e) 18.00%