In order to maximize your credit score, you must have exactly ____ major credit cards. 


Answer
3.

2 
In order to maximize your credit score, you must have exactly ____ major credit cards. 


3.

2 
The U.S. has a ___tax system. 


3.

progressive 
The goal of the firm is to maximize 


3.

shareholder wealth 
Which form of a corporation is not subjected to double taxation? 


4.

Both A and B 
What percentage of your credit score is made up from your employment status? 


1.

An individual buying a financial security would be an 


3.

in financial market 
A company's current ratio should always be above: 


Which of the following is NOT a real asset? 


Selling price per unit

$35

Manufacturing cost

$4,100 per month plus $15 per unit

Administrative expense

$2,410 per month plus $1.80 per unit

Sales commissions

11% of sales

Advertising expense

$1,870 per month


$96,145


$87,765


$116,015


$107,515

Sales ($35 x 6,700)


$234,500

Variable expenses:



Manufacturing ($15 x 6,700)

$100,500


Sales commissions (11% x $234,500)

25,795


Administrative ($1.80 x 6,700)

12,060

138,355

Contribution margin


96,145

Fixed expenses:



Manufacturing cost

4,100


Advertising expense

1,870


Administrative

2,410

8,380

Net operating income


$87,765

Which of the following is a theoretical measure of a firm's strength? 


Owner's equity is 


You sell your house and make $10,000. The tax you would pay on this is: 


capital gains 
Labeau Products, Ltd., of Perth,
Australia, has $14,000 to invest. The company is trying to decide between two
alternative uses for the funds as follows: (Ignore income taxes.)


Invest
in
Project X 
Invest
in
Project Y 
Investment required

$14,000

$14,000

Annual cash inflows

$6,000


Single cash inflow at
the end of 9 years


$68,000

Life of the project

9
years

9
years


The company's discount rate is
16%.

To determine the appropriate
discount factor(s) using tables, click here to view Exhibit 12B1 and Exhibit 12B2.
Alternatively, if you calculate the discount factor(s) using a formula, round
to three (3) decimal places before using the factor in the problem.

Required:

(1)

Determine the net present value. (Round your answer to the nearest dollar amount. Negative
amount should be indicated by a minus sign. Omit the "$" sign in
your response.)


Net
Present
Value 
Project X

$13,642

Project Y

$3,884


(2)

Which investment would you
recommend that the company accept?




Project X

Item

Year(s)

Amount
of
Cash Flows 
16%
Factor 
Present
Value of Cash Flows 
Project X:





Investment

Now

$(14,000)

1.000

$(14,000)

Annual
cash inflow

19

$6,000

4.607

27,642

Net
present value




$13,642

Project Y:





Initial
investment

Now

$(14,000)

1.000

$(14,000)

Single
Cash inflow

9

$68,000

0.263

17,884

Net
present value




$3,884


Project X should be selected since
it has a higher net present value.
