1. Three years ago a corporation bought a piece of equipment for $250,000, which required a one-time working capital expense of $15,000. The equipment has two more years of useful life, but the firm is able to sell the equipment for $15,00, which is well below its current book value based on a ive-year straight line depreciation method. Given that the firm's marginal corporate tax rate is 34%, what is the terminal cash flow for this equipment?
A. 28,900
B. 58,900
C. 30,000
D. 43,900
2. A firm has the opportunity to invest in a start-up solar company, a new cell phone technology, or the latest in television screen. These options are BEST described as _____projects.
A. replacement
B. independent
C. mutually exclusive
D. scaled back