1. In calculating the Net Present Value of an investment, the basic discount rate used is usually:

A) The weighted avergage cost of capital for the company.

B) The dividend rate on preferred dividends of the company.

C) The rate that the company wants to make for any investment of a similar type.

2. The factoring of accounts receivable consists of

A) pledging accounts receivable as collateral for a loan.

B) allowing a finance company to manage your accounts receivable for a fee.

C) buying accounts receivable from a factor.

D) writing off bad debts

3. A company's debt and equity numbers are:

Mortgage $200,000 at 6%'

Common Shares $500,000 Retained Earnings $300,000

The owners expect a 10% return on their investment

The weighted average cost of capital is:

A) 9.2%

B) 6.8%

C) 10%

D) 6%