26)

Which of the following is true:

Select one:

a. Government plays an important role in creating competitive advantage for local manufacturers by inviting foreign participation.

b. Competitive advantage is only sustainable via law and regulation enforcements.

c. Blue ocean strategy is an idea related to value creating applicable to capital budgeting decisions.

d. In economies of scale, the total fixed and variable costs will be spread over a larger amount of output.

27)

Last year Jackson Corporation reported total liabilities and owners equity of $600, net fixed assets of 500, equity of $400, dividends of $10, and retained earnings in the period of $50. Jackson Corporations internal growth rate is closest to

Select one:

a. 13.2%

b. 9.1%

c. 11.1%

d. 12.3%

28)

Suppose that analysts estimate that in four years time, the fair price of Astra Zeneca will be at $25 per share, which can be split into $10 for its no-growth component and the remaining value for its PVGO component. The PVGO value is derived from the advantage of having a special licensing by the government. What will happen to the fair price if all of a sudden, news breaks out that the government has just decided to discontinue the special license from year 5 onward for the firm (Assuming the required return is 10%)?

Select one:

a. The fair price per share today will fall by $10

b. The fair price per share today will fall by $15

c. The fair price per share today will fall by $9.31

d. The fair price per share today will fall by $10.24

29)

Given the following data for Project 2MDB: Cash flow in nominal terms: CF0=-300, CF1=280, CF2=270. Real discount rate = 4%. Inflation rate=6%. Coupon rate of bond raised to partially finance Project 2MDB=5% The NPV of the project is closest to

Select one:

a. $178

b. $171

c. $216

d. $184

30)

Manchester Enterprise currently has $73,900 in sales and is operating at 63 percent of the firm's capacity. How much sales should grow to reach its full capacity level?

Select one:

a. $84,532

b. $117,302

c. $43,402

d. $100,572