1. Dazzle Company uses straight-line depreciation and is considering a capital expenditure for which the following relevant cash flow data have been estimated:

Estimated useful life:	three years
Initial investment:	$500,000
Savings year 1:	$200,000
Savings year 2:	$150,000
Savings year 3:	$225,000
Residual value after three years	$20,000

The accounting rate of return at Dazzle Company is closest to

Select one:

a. 32.00%

b. 6.33%

c. 38.33%

d. 5.51%

Please explain

2. Assuming an interest rate of 6%, the present value of $16,000 received at the end of each year for six years would be closest to

Select one:

a. $10,640

b. $111,600

c. $128,000

d. $78,672