1. In which of the following cases is an overdraft created in a drawer's account?

A. when a properly payable check issued by the drawer is presented for payment, but the drawer's account does not have sufficient funds in it

B. when the drawer issued a stop-payment order for a check, but the bank still goes ahead and pays the holder of the check

C. when the bank pays the holder of a check in which the amount payable is altered to indicate a higher amount than was originally intended

D. when the payee presents the check after six months from the date of the check and the bank still pays the holder

2. A machine has a first cost of $50,000. Its market value declines by 20% annually. The operating and maintenance costs start at $2500 per year and increase $2000 per year. The firm’s MARR is 9%. Determine its economic service life.

4 years

3 years

2 years

5 years

6 years

Show your method, approach, calculations to the best of your ability.