1. If a company reported annual revenues of $1 billion and annual expense of $900 million, with 1 million shares outstanding, what would the company's price per share, earnings per share, and price/earnings ratio be? And how would this compare to the current market average price/earnings ratio?

2. Assume you are the CFO of a publicly-traded corporation. You are seeking to borrow and/or raise some money. Assume you have two options:

• Option #1: Sign with a bank for a 30-year amortized $100,000 bank loan at 3% APR

• Option #2: Issue a 30 year $100,00 bond with a 3% coupon rate

Assuming that you knew interest rates were going to increase in the future, which of the two options would provide you with more free cash flow and flexibility to re-invest at the higher interest rate over the first 20 years? Option 1, Option 2, or both?

3. A factory costs $400,000. It will produce an inflow of cash, after operating costs, of $100,000 in year 1, $200,000 in year 2, and $300,000 in year 3. The opportunity cost of capital is 12%. Calculate the NPV.