1) A machine is the only asset in a CCA asset class with a 20% CCA rate. The machine was purchased in year 1 for $10,000. What is the CCA charge in year 2? a) $1,000 b) $1,600 c) $1,800 d) $2,000

2) What effect will a reduction in the cost of capital have on the accounting break-even level of sales? a) it raises the break-even level b) it reduces the break-even level c) it has no effect on the break-even level d) this cannot be determined without knowing the length of the investment horizon

3) When can a firm be certain it will always being able to accept all its positive NPV projects and pay as high a dividend as it would like to? a) when there are no taxes b) when debt is risk free c) when it can costlessly raise capital d) when the exchange rate is fixed