Velasquez Manufacturing has two vastly different lines of business: Alpha and Omega. The Alpha line is the riskiest of the two, and accounts for 72 percent of the firm’s sales. When deciding which project proposals should be accepted, the managers should:

Esther, the sales manager for Reynoso Products, wants to sponsor a one-week “Customer Appreciation Sale” during which the firm will sell additional units of a product at the lowest price possible without negatively affecting the firm’s profits. Which one of the following represents the price that should be charged for the additional units during this sale?

Which of the following statements regarding a firm’s pretax cost of debt is accurate?

You can make a one-time sale if you will grant a new customer 30 days to pay. This customer wants to purchase an item with a sales price of $499 and a variable cost of $287. You estimate the probability of default at 33 percent. The monthly interest rate is .98 percent. Should you grant credit to this customer? Why or why not?

Living Colour Company has a project available with the following cash flows: Year Cash Flow 0 −$ 33,150 1 8,330 2 10,050 3 14,400 4 16,090 5 11,060 If the required return for the project is 9.1 percent, what is the project’s NPV?

You are currently selling 48 units per month at a price of $199 per unit. Your variable cost of each unit is $87. If you switch from your current cash sales-only policy to a net 30 policy you think your sales will increase to a total of 55 units per month. The monthly interest rate is 1.2 percent. What is the present value of this switch using the accounts receivable approach?

Which one of the following represents the level of output where a project produces a rate of return just equal to its requirement?

Which one of the following statements best defines the efficient market hypothesis?

The CFO of Shelby & Muhammad receives frequent capital funding requests from the firm’s division managers. These requests are seeking funding for positive net present value projects. The CFO continues to deny all funding requests due to the financial situation of the company. Apparently, the company is:

Summertime Adventures is a seasonal firm that enjoys its highest sales during July and August. The company purchases inventory one month before it is sold and pays for its purchases 60 days after the invoice date. Which one of the following statements is supported by this information?