1. a company purchases a new piece of equipment for 175,000. for tax purposes, the comoang is permitted to depreciate the asset over a period of 7 years. if the tax rate is 40% what is the cash flow benefit of the depreciation charge in year 1?

2. calculate the price if a 5 year 4.25% corporate bond that has a face value of 1000. Assume the risk free discount rate for all periods is 3.75% and the bond trades at a spread of 115 basis points over the risk free asset.