1. ABC firm sells 8,000 units for 400-day period of business, the ordering costs are $80, and the carrying costs are $2 per unit. The company desires to maintain a safety stock of 400 units and three days are required for delivery. What is the total inventory cost associated with the EOQ?

A. $1400

B. $1600

C. $1800

D. $2000

2. ABC firm sells 8,000 units for 400-day period of business, the ordering costs are $80, and the carrying costs are $2 per unit. The company desires to maintain a safety stock of 400 units and three days are required for delivery. What is the reorder point?

A. 300 units

B. 320 units

C. 420 units

D. 460 units

3. "In the case of a pledging, the company still owns the accounts receivable, therefore, if customers fail to send the payment, the company is responsibile to pay it back to the bank." This statement is __________.

A. True

B. False

4. Which of the following represents the interest rate risk when investing in bonds?

A. When the market interest rate increases, the bond price increases.

B. When the market interest rate decreases, the bond price decreases.

C. When the market interest rate increases, the bond price decreases.

D. When the market interest rate decreases, the bond price stays the same.

5. In a short-term bank loan, if the bank guarantees the amount of money to be loaned to a company, it is called ____________.

A. Line of credit

B. Legally binding

C. Pledging

D. Factoring

6. Which of the following comes closest to the present value of receiving $1000 in the 6th year if the interest rate is 10%?

A. $189.33

B. $256.33

C. $372.45

D. $564.47

7. A 91-day Treasury bill is selling for $96.88 per $100 of its face value. What is the quoted annual interest rate for this 91-day T-Bill?

A. 12.92%

B. 12.51%

C. 12.34%

D. 12.15%