1. Precision Ltd is considering an equipment that costs $176,000, and is depreciated on a straight-line basis to zero over its 11-year useful life. The equipment is expected to be used in a 7-year project. Precision Ltd believe that at the end of the project (i.e. year 7), the company can sell the equipment for $22,000. If the tax rate is 30%, what is the net cash flow from the sale of this equipment in year 7?

$32,600

$33,300

$34,100

$34,600

2. Delaware Bakery uses specialized ovens to bake its bread. One oven costs $689,000 and lasts about 4 years before it needs to be replaced at the end of its useful life. The annual operating cost per oven is $41,000. If the required rate of return is 13%, what is the equivalent annual cost of an oven?

-$272,638

-$248,313

-$232,407

-$200,561