1. Krueger Industrial Smoothing had sales last year of $8 million with cost of good sold running 55% of sales and other operating costs of $500,000. Their tax rate is 35%, depreciation is $1.2 million and interest expense is $850,000. What was their Operating Cash Flow?

2. You have $5,000 to invest for the next year and are considering three alternatives: A money market fund with an average maturity of 30 days offering a current yield of 6% per year. A 1-year savings deposit at a bank offering an interest rate of 7.5%. A 20-year U.S. Treasury bond offering a yield to maturity of 9% per year. What role does your forecast of future interest rates play in your decisions?

500 words.