1. Suppose a company has proposed a new 4-year project. The project has an initial quality of $28,000 and has expected cash flows of $8,000 in year 1, $10,000 in year 2, $11,000 in year 3, and $12,000 in year 4. The required rate of return is 12% for projects at this company. What is the probability index for this project? (Answer to the nearest hundredth, e.g. 1.23)

2. A company is considering a 5-year project to open a new product A new machine with an installed cost of $120,000 would be product, which is estimated to produce sales of $60,000 in new revenues each year. The cost of goods sold to produce these sales (not including) estimated at 43% of sales, and the tax rate at this firm is 35%. If straight-line depreciation is used to calculate annual depreciation, what is the estimated annual operating cash flow from this project each year? (Answer to the nearest dollar.)