1 A machine costs $80,000, and requires $20,000 in maintenance annually over its three-year life. After three years, the salvage value will be zero. The machine has a CCA rate of 30%. Assuming a tax rate of 34% and a discount rate of 10%, what is the equipment's equivalent annual cost?

2The dividend on a company's stock will be $7.75 in one year, $8.75 in two years and $9.75 in three years. In three years, you can sell the stock for $87.50.If you require a 14.25% rate of return on your investment, how much are you willing to pay for a share of this stock?