1. Given are the following data for year 1: Revenue = $150 million; Variable cost = $40 million; Fixed cost = $20 million; Depreciation = $10 million; Interest expense = $15 million; capital Investment = $25 million; change in working capital = $5 million. Corporate tax rate is 30%. Calculate the free cash flow to firm (FCFF) for year 1:

	A.	$26 million.
	B.	$36 million.
	C.	$66 million.
	D.	$56 million.

2. THE FOLLOWING INFORMATION RELATES TO QUESTIONS 14, 15 AND 16 ONLY

Anker Inc. is a listed company in New York. Its current before interest after-tax operating cash flow is $100 million. The cash flow is expected to grow at 6% per annum over the next three years, after which the growth will fall to 3% per annum and stay at this rate forever. The following information is also available:

Tax rate	30%
Risk-free rate	4%
Market return	12%
Equity beta	2
Cost of debt	7%
D/E	60%

Given the above data, the after-tax weighted average cost of capital (WACC) of Anker Inc. is around:

	A.	18.25%
	B.	Not enough information to calculate
	C.	14.34%
	D.	19.38%