1. Gary’s Pipe and Steel company expects sales next year to be $960,000 if the economy is strong, $680,000 if the economy is steady, and $381,000 if the economy is weak. Gary believes there is a 35 percent probability the economy will be strong, a 30 percent probability of a steady economy, and a 35 percent probability of a weak economy. What is the expected level of sales for next year?

2. "A cash flow for a prospective project in actual dollars has a rate of return of 20.6%. The general inflation rate is 3.1%, and the company s MARR is 15%. What is the inflation-free rate of return? Enter your answer as a percentage between 0 and 100."