1. The Chicken Little Hatchery Company paid $520 in dividends and $426 in interest expense. The addition to retained earnings is $350 and net new equity is $380. The tax rate is 32 percent. Sales are $7,125 and depreciation is $968. What are the earnings before interest and taxes?

2. A. Six years ago, the Zircon company purchased a long-term asset for $3,875,500. The asset has a 20% CCA rate. Recently, at the end of year six, Zircon sold the asset for 850,000. Given this information, determine the value of the terminal loss or recapture at the end of year six.

B. Zircon Company's effective tax rate is 26%. Calculate the value of the CCA tax shield for the third year (year 3).