Most businesses replace their computers every two to three years. Assume that a computer costs $2,000 and that it fully depreciates in 3 years, at which point it has no resale value and is thrown away. Instructions: Enter your responses rounded to the nearest dollar.

a. If the interest rate for financing the equipment is 10 percent, what is the minimum annual cash flow that a computer must generate to be worth the purchase? The minimum annual cash flow must be at least $? .

b. Suppose the computer did not fully depreciate but still had a $250 value at the time it was replaced. What is the minimum annual cash flow that a computer must generate to be worth the purchase? The minimum annual cash flow must be at least $? .