1. Your Company has an old machine to sell. It has a salvage value of $40,000 at this moment. You sold it for $60,000. The corporate tax rate is 35%. What is the cash flow you get from sale of the machine?
2. A portfolio has 30% of its value in IBM shares and the rest in Microsoft (MSFT). The volatility of IBM and MSFT are 35% and 30%, respectively, and the correlation between IBM and MSFT is 0.5. What is the standard deviation of the portfolio?