1. Your firm needs to buy a metal stamping press. The CFO presents you with two analyses: one for a press that is automated, requiring little labor to operate, and another that is manual, requiring a significant amount of labor to operate. This is an example of a decision involving

A. positive NPV projects

B. independent projects

C. crossover projects

D. working capital projects

E. mutually exclusive projects

2. Which of the following would have the lowest amount of systematic risk?

A. A portfolio of the common stocks of 100 different companies

B. The market portfolio

C. A portfolio made up entirely of Treasury bills

D. A portfolio half invested in the market portfolio and half invested in stocks with betas of 1.50

E. A portfolio half invested in the market portfolio and half invested in Treasury bills

3. Management's ability to control operating expenses is most directly reflected in the firm's _________ ratios.

A. short-term solvency (liquidity)

B. profitability

C. market value

D. asset management (turnover)

E. long-term solvency (financial leverage)