1.What is the effective borrowing rate (EBR) for the following 6-month (182-day) line of credit: CL = total credit line $650,000; AL = Average outstanding amount $389,000; CF = Commitment fee 0.36% (not annualized) on unused line; IR = Annual Interest rate 2.1% over LIBOR (which is currently 4.7%)?

	A.	0.1412
	B.	0.0730
	C.	0.3858
	D.	0.0364
	E.	0.2206

2.Your firm has sales of $10,000,000, net income of $800,000, total assets of $10,000,000, and equity of $4,000,000. Your firm projects an increase in sales of 15 percent and has a dividend payout ratio of 30 percent? What is the sustainable growth rate, g?

	A.	16.28%
	B.	10.76%
	C.	12.57%
	D.	18.95%
	E.	14.32%

3. A $200,000 face value, 182-day Treasury Bill is currently selling at a quoted discount of 5.9%. What are the dollar discount and purchase price?

	A.	$5,965.56; $194,034.44
	B.	$4,751.36; $195,248.64
	C.	$6,847.12; $193,152.88
	D.	$6,327.02; $193,672.98
	E.	$5,233.98; $194,766.02

4.Your firm has annual sales of 11 million. Cost of goods sold represent 85percent of this value and purchases are 80 percent of cost of goods sold. Your firm has an AAI (Average Age of Inventory) of 60 days, an APP (Average Payment Period) of 25 days, and an ACP (Average Collection Period) of 45 days. What is your firm's OC (operating cycle)? (You may want to save your work/calculation for the other two related questions.)

	A.	105 days
	B.	80 days
	C.	85 days
	D.	40 days
	E.	130 days

5. Your firm has annual sales of 11 million. Cost of goods sold represent 85percent of this value and purchases are 80 percent of cost of goods sold. Your firm has an AAI (Average Age of Inventory) of 60 days, an APP (Average Payment Period) of 25 days, and an ACP (Average Collection Period) of 45 days. What total amount of resources has your firm invested in its cash conversion cycle? (YOU MAY WANT TO SAVE YOUR CALCULATIONS FOR THE OTHER TWO RELATED QUESTIONS.)

	A.	$1,960,329
	B.	$2,893,150
	C.	$3,405,479
	D.	$1,536,986
	E.	$2,380,822