1) Which of the statements below is? FALSE? A

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1) Which of the statements below is? FALSE?

A. Project A has a higher y−axis intercept for its NPV profile than mutually exclusive Project B. As long as the profile of Project A is above the profile of Project? B, Project A will have a higher NPV value for that particular discount rate.

B. Project A has a higher y−axis intercept for its NPV profile than mutually exclusive Project B. As we proceed past the crossover rate to the right on the x−?axis, Project? B's profile will be above Project? A's profile.

C.Project A has a higher y−axis intercept for its NPV profile than mutually exclusive Project B. This means that Project A has a lower NPV than Project B when the discount rate is zero.

D. Project A and Project B are mutually exclusive. The two projects intersect in terms of NPV at a discount rate labeled the crossover rate

2) One method a company may use to handle a cash shortfall is to draw cash from savings.

A) True

B) False

3) Harris Electronics bills its clients on the first of the month. For? example, any sale made in the month of July is billed August 1 and is due September 1. Clients traditionally pay as?follows: 50% by the end of the first month? August), 40% by the end of the second month? (September), 8% by the end of the third month?(October), and? 2% default on their bills. What is the dollar value of January billings collected in? April?

First Quarter Sales -Jan $88,000 Feb $74,000 March $96,000

Second Quarter Sales - April $99,000 May $82,000 June $63,000

A. $29,600

B.$0.00

C.$7,040

D.?$5,920

4) In terms of the? float, the buyer of a product wants to?________ and the seller wants to? ________.

A. increase the collection? float; decrease the disbursement float

B. increase the disbursement? float; decrease the collection float

C. decrease the collection? float; decrease the disbursement float

D. decrease the disbursement? float; decrease the collection float

5) Pacific Motors Inc. plans to issue? $3,000,000 of commercial paper with a

6−month maturity at? 98% of par value. What is the? EAR?

A.4.08%

B.4.12%

C.4.00%

D.2.00%