1. The goal of working capital management is to
a. balance current assets an liabilities
b. pay off short term debts
c. achieve a balance between risk and return in order to maximize the firms value
d. achieve a balnce between short term an long term assets so that they add to the achievement of the firms overall goals
2. Your firm needs a computerized machine tool lathe which costs $50,000 and requires $12,000 in maintenance for each year of its 3-year life. After three years, this machine will be replaced. The machine falls into the MACRS 3-year class life category. Assume a tax rate of 35 percent and a discount rate of 12 percent. If the lathe can be sold for $5,000 at the end of year 3, what is the after-tax salvage value?