State whether the following argument is correct or not, and explain the reasons.

1. Suppose that a company made $40,000 in toys from $1,000 in steel, $5,000 in energy and other material, and $10,000 in plastic. If the company payed 10% of its product as tax, $8,000 for wage, $5,000 for rent, $7,000 for dividend, its value added would be $24,000.

2. According to the growth accounting formula with the capital income share of 0.3, a 1% annual growth rate in labor, a 4% annual growth rate in capital, and a 3% annual growth rate in GDP mean that overall productivity must be growing at an annual rate of 1.1%.