Jenkins Security has learned that a rival has offered to supply a parking garage with security for ten years for $40,000 up front and a further $20,000 per year. If Jenkins Security offers to provide security for eight years for an upfront cost of $65,000 and a separate yearly payment, what is the maximum that this yearly payment can be so that Jenkins' offer matches the equivalent annual annuity of their rival's offer? (Assume a cost of capital of 9%.)

1. $1,821

2. $1,720

3. $2,023

4. $1619

Temporary Housing Services Incorporated (THSI) is considering a project that involves setting up a temporary housing facility in an area recently damaged by a hurricane. THSI will lease space in this facility to various agencies and groups providing relief services to the area. THSI estimates that this project will initially cost $5 million to set up and will generate $24 million in revenues during its first and only year in operation (paid in one year). Operating expenses are expected to total $10 million during this year and depreciation expense will be another $3 million. THSI will require no working capital for this investment. THSI's marginal tax rate is 35%. Ignoring the original investment of $5 million, what is THSI's free cash flow for the first and only year of operation?

1. $12.69 million

2. $4.15 million

3. $10.15 million

4. $5.00 million