Below is the income statement and balance sheet for a retail corporation.

What is the corporation's debt to total capital in year 2?

• A. 41%
• B. 19%
• C. 6%
• D. 71%

Which one of the following statements regarding working capital management is not correct?

• A. An attempt to minimize carrying costs and shortage costs associated with inventory levels is an objective of working capital management
• B. The cash, inventory accounts payable and accounts receivable components of working capital are constantly changing during the operating cycle
• C. Seasonal demand for me products can cause working capital problems that must De anticipated and managed
• D. Increasing costs associated with the manufacture and sale of products will not impact the short-term management of working capital

A retail company sells numerous products m its one department store. The income statements tot two of these products are shown below

After reviewing the income statements, the president is considering drooping one or both products. Which produces), if any should the company discontinue?

• A. Neither Product A nor Product B
• B. Product A only
• C. Product B only
• D. Both Product A and Product B

Delman inc considering upgrading its manufacturing facility, and it is expected that the new equipment will cost $180,000. The project's is considering similar to the risk of the firm's other investments. the after-tax cash inflows attribute to this project are expected to increase by $50,000 every year over the next five years. The firm's marginal tax rate is 30%, its debt-to-equal ratio (using market values) is 60%, and its pre-tax cost of debt and equity are 8% and 12% respectively. the weighted average cost of capital appropriate for evaluating this project is closest to

• A. 8.0%
• B. 9.6%
• C. 8.2%
• D. 10.5%

K Malone is a successful entrepreneur, Currently she is considering investing in a capital protect, which would benefit tourism in North Caroina Because of tourism, the State of North Carolina is willing to lent) her
$150,000 at a rate of 5%. well below the market rate Her estimated net cash flows for the 3-year lifetime of the project are S15 000 $89,000 and $60,000 respectively Recommend whether or not Malone should undertake this project.

• A. She should not undertake this project because the net present value NPV is ($14.051).
• B. She should undertake this project because the net present value (NPV) is $31,022.
• C. She should undertake this project because the present value (PV) of this project is $146,843
• D. She should not undertake this protect because the net present value (NPV) is ($3.157)