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1. After the last year of your project’s time frame, which is Year 6, you believe cash flows will grow at about 5.0% per year forever. An initial estimate of Year 6 net incremental cash flow is $2 million. If WACC is 12.0%, what is the terminal value that should be added to Year 6 cash flows?

a) $28.6 million

b) $14.0 million

c) $30.0 million

2. Say that your firm's depreciable capital investment is $2 million. If you use the 7-year MACRS schedule for determining depreciation expense, how much will depreciation be for year 3?

a)  $349,800.00

b)  $285,714.28

c) $249,800.00

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