Which of the following statements is valid? 1. Financial intermediation refers to the process whereby potential borrowers are brought together with potential lenders by a third party. II. There are two main types of financial markets: the primary market deals in new securities and the secondary market deals in second-hand securities. O Statement l: False Statement II: True O Statement I: True Statement II: False O Statement l: False Statement II: False Statement I: True Statement II: True Beehive Ltd is considering whether to enter into a new project. The machinery which would be used to produce the goods for the contract was purchased seven years ago at a cost of $80,000, with an estimated life of ten years. Depreciation is on a straightline basis. The machinery has been idle for some time, and if not used on this contract would be scrapped and sold immediately for an estimated $5,000. After use on this contract the machinery would have no value, and would have to be dismantled and disposed of at a cost of $1,500. Ignoring the time value of money, what is the relevant cost of the machine to the new contract? * $3,500 $24,500 $6,500 $5,000