If the variability of the returns on large-company stocks were to decrease over the long-term, you would expect which one of the following as related to large-company stocks to occur as a result?

With respect to capital project analysis, which of the following statements is accurate?

Mendoza Lighting sells 72 units per month at an average price of $529 per unit. The company thinks it can increase sales by an additional 24 units per month if it switches to a net 30 credit policy. The monthly interest rate is .32 percent and the variable cost per unit is $317. What is the incremental cash inflow of the proposed change in the credit policy?

Gutierrez Goods has several proposed independent projects that have positive NPVs. However, the firm cannot initiate any of the projects due to a lack of financing. This situation is referred to as:

Bui Bakery has a required payback period of two years for all of its projects. Currently, the firm is analyzing two independent projects. Project X has an expected payback period of 1.4 years and a net present value of $6,100. Project Z has an expected payback period of 2.6 years with a net present value of $18,600. Which project(s) should be accepted based on the payback decision rule?

You are reviewing a project with estimated labor costs of $17.85 per unit, estimated raw material costs of $36.23 per unit, and estimated fixed costs of $17,600 per month. Sales are projected at 18,400 units, ±3 percent, over the one-year life of the project. Cost estimates are accurate within a range of ±2 percent. What are the total variable costs for the best-case scenario?

Your firm is offered credit terms of 2/15, net 35. What is the effective annual interest rate on this arrangement? Assume 365 days per year.

Stray Cats has annual sales of $847,000, annual depreciation of $47,000, and net working capital of $43,000. The tax rate is 21 percent and the profit margin is 7.3 percent. The firm has no interest expense. What is the amount of the operating cash flow?

Which two of the following are the key elements in determining the break-even default rate on a credit policy?

A stock has an expected return of 11.89 percent and its reward-to-risk ratio is 7.4 percent. If the risk-free rate is 3 percent, what is the stock’s beta?