A firm offers credit terms of 2/15, net 45. What effective annual interest rate does the firm earn when a customer for goes the discount?

Maud’Dib Intergalactic has a new project available on Arrakis. The cost of the project is $43,000 and it will provide cash flows of $25,400, $32,300, and $34,000 over each of the next three years, respectively. Any cash earned in Arrakis is “blocked” and must be reinvested in the country for one year at an interest of 2.1 percent. The project has a required return of 9.9 percent. What is the project’s NPV?

Based on market values, Gubler’s Gym has an equity multiplier of 1.46 times. Shareholders require a return of 10.91 percent on the company’s stock and a pretax return of 4.84 percent on the company’s debt. The company is evaluating a new project that has the same risk as the company itself. The project will generate annual aftertax cash flows of $277,000 per year for 7 years. The tax rate is 21 percent. What is the most the company would be willing to spend today on the project?

Which one of these is indicative of a restrictive short-term financial policy?

The change in revenue that occurs when one more unit of output is sold is referred to as:

Western Electric has 28,000 shares of common stock outstanding at a price per share of $71 and a rate of return of 13.40 percent. The firm has 6,900 shares of 7.00 percent preferred stock outstanding at a price of $91.00 per share. The preferred stock has a par value of $100. The outstanding debt has a total face value of $380,000 and currently sells for 107 percent of face. The yield to maturity on the debt is 7.84 percent. What is the firm’s weighted average cost of capital if the tax rate is 21 percent?

Green Submarine has a project with the following cash flows: Year Cash Flows −$ 17,450 1 6,680 2 11,450 3 7,630 4 −2,650 The discounting rate is 6 percent and the reinvestment rate is 8 percent. What is the MIRR for this project using the combination approach?

Accessorize! currently sells 219 units per month at a price of $46 per unit. If it switches to a net 30 credit policy, monthly sales are expected to increase by 28 units. The monthly interest rate is .57 percent and the variable cost per unit is $21. What is the net present value of the proposed credit policy switch?

A firm has an accounts receivable period of 22 days. Which one of the following actions will tend to increase the accounts receivable period?

Which one of these is most associated with an IRR of negative 100 percent?