1. Five years ago, a company purchased a semi-automatic assembly line machine for $100,000. If the same machine costs $150,000 today, when the market interest rate is 12% per year, then we can deduce that the annual inflation rate during this period was close to what value? (Assume the cost of the machine increases at the same rate as the rate of inflation)

2. The initial investment to permanently build (to infinity) a road that will improve access to a rural area is $1,000,000. The annual maintenance cost is $20,000 per year. Improved accessibility will result in community benefits of $70,000 per year. At an interest rate of 6% per annum, the conventional RAC value of this project is approximately?