1.Alex is considering investing in one of the two 10-Yr Treasury Bonds or a 10-yr Corp bond.The nominal rate on T-bond is 5.25% and Corporate bond rate is 6.25%.The current Inflation rate is 3%.The liquidity premium is 0.50%, Maturity risk premium is 1.% and Default risk premium is 0.75%.Using Real Rate of return, Which Bond has a higher return (show your calculations for both bonds).

a.Corporate Bond

b.Treasury Bond

c.Both bonds have the rate

d.Both bonds have the same rate but T-bond is better

2.Sequoia Brewery produced revenues of $1,145,227 in 2016. It has expenses (excluding depreciation) of $812,640, depreciation of $131,335, and interest expense of $81,112. It pays a marginal tax rate of 34%. What is the firm's net income after taxes?

a.$40,848

b.$79,292

c.$120,140

d.$248,475

3.Jason Traders has sales of $833,587, a gross profit margin of 32.4%, and inventory of $178,435. What is the company's inventory turnover ratio?

a.3.16 times

b.4.10 times

c.4.67 times

d.None of the above

4.Your firm has an equity multiplier of 2.47.What is its debt-to-equity ratio?

a.-0-

b.0.60

c.1.47

d.1.74`

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