1. Chers Fab Wigs has earnings before taxes of $34,112, and the depreciation expense for the year is $3,210. The firm paid $4,306 in taxes and $2,310 in interest during the year. What is the operating cash flow for the year?

1. $37,636

2. $35,326

3. $32,948

4. $30,706

2. You just won a lottery and are given two choices: a lump sum payment today of $750,000; or annuity payments of $50,000 at the end of each of the next twenty years. Which of the following statements is correct?

1. You should be able to sell this ticket for more than $1 million.

2. At every possible interest rate, the annuity is the best choice.

3. You prefer the annuity if the interest rate is zero percent.

4. At every possible interest rate, the lump sum is the best choice.