1. An asset used in a four-year project falls in the five-year MACRS class for tax purposes. The asset has an acquisiton cost of $8,300,000 and will be sold for $1,700,000 at the end of the project. If the tax rate is 35%, what is the after-tax salvage value?

Use the following table below:

Year ACRS %

   1 20.00%

   2 32.00%

3 19.20%

4 11.52%

5 11.52%

6 5.76%

2. Hurley Inc. is considering a project that has the following cash flow data. What is the project's payback?

Year 0: ($1,150)

Year 1: $500

Year 2: $500

Year 3: $500

A. 1.86 years

B. 2.07 years

C. 2.30 years

D. 2.53 years