1. A firm has a general-purpose machine, which has a book value of $400,000 and can be sold for $600,000 in the market. If the tax rate is 30%, what is the opportunity cost of using the machine in a project considering the tax issues?

Group of answer choices

$600,000

$540,000

$400,000

None of the above

2.

A common stock will pay a dividend of $7 next year. After that, the dividends are expected to increase indefinitely at 6% per year. If the discount rate is 14% what is the present value of the stream of dividend payments? Hint-just focus on what is going on with the cash flow here (dividend). Show your work. The answer is closest to (rounded to two decimal places):

Group of answer choices

66.67

60.14

87.50

100.00