1. In order to finance a new product line, a company that makes high-temperature ball bearings borrowed $2.1 million at 6%per year compound interest. The company repaid the loan in a lump sum amount after 2 years. What was the amount and percentage of interest based on the original principal? Enter your answer in thousands of dollars and not millions.
2. In an effort to increase its customer base, a company set the project MARR at exactly the WACC. If equity capital costs 8.5% per year and debt capital costs 13.75% for the project, what is the equity-debt percentage mix of capital required to make the WACC = 10%?