1)Because the profit from investing in a new project adds to a company's preexisting income before taxes and this additional pretax income will be taxed at the company's marginal tax rate, the marginal tax rate is the appropriate tax rate to use in the adjustment of the beforetax cost of debt in determining the aftertax cost of debt.

2)For a given company, the intersection of the investment opportunity schedule and the marginal cost of capital schedule is the point where the company's weighted average cost of capital is minimized.

Which of the above statements are true?