Your company purchases machinery for $90,000. The machinery has a CCA rate of 25%. You intend to sell the machinery in year 12 for a salvage value of $18,000. At the time of sale, you still anticipate having other assets in the class. The relevant tax rate is 35%. Company uses a 10% rate of return. Determine the present value of the incremental tax shields generated.

a.$20,043

b.$21,477

c.$19,541

d.$22,500

e.$22,911

and

You purchased a stock of Farjo Inc. for $500. One year later, you received a dividend of $13 and sold the stock for $516. What is the dividend yield for Farjo Inc.?

a.5.80%

b.2.60%

c.3.20%

d.5.62%

e.2.52%