37. Which of the following has accelerated the globalization of financial markets: A. An expansion of protectionism practices B. The reduction of government regulations C. The movement toward fixed exchange rates D. A decrease in foreign access to domestic markets

38. April is a college student who wants to open a bank account for the first time. She has $500 cash to deposit in the account initially. The bank she chooses is not near her dorm, and it's difficult for her to get there. She has a part-time job and receives a bi-weekly paycheck that will be directly deposited into her account. Which of the following types of accounts should she ask for at the bank: A. Checking C. Money market B. Savings D. Certificate of deposit

39. Which of the following is not a standard financial statement: A. Income statement C. Shareholder sheet B. Balance sheet D. Cash flow statement

40. What does an income statement show about a company over a period of time? A. Profitability C. Equity B. Reliability D. Liabilities

41. The numbers listed in a stock table's 52-week high and low column tell you A. the best prices for the stock. B. if the stock price is overvalued. C. the range of prices for the year. D. the range of where the stock price should be.

42. Which of the following is a true statement about ticker symbols: A. They uniquely identify a company. B. They tell you what kind of stock it is. C. They are made up of the first three letters of a company's name. D. They are only given to companies on the New York Stock Exchange.

43. Which of the following is an example of a lending investment: A. Stocks C. Antiques B. Homes D. Bonds

44. Bennett has just finished college and has moved into her own apartment that is located on a bus line. She'll be able to take the bus to her new job that she's scheduled to start in a month. In fact, she'll need to rely on bus transportation until she saves money to buy a car. What insurance coverage should she have? A. Renter's insurance and temporary short-term health insurance B. Health and life insurance C. Renter's insurance and COBRA D. Auto insurance and temporary short-term health insurance

45. A labor strike against a major employer is an example of a(n) __________ risk. A. human C. economic B. natural D. internal

46. What type of financial records do businesses need to maintain in order to keep track of their transactions? A. Tax identification C. Payroll information B. Accounts receivable D. Operating procedure

PV Co, a large stock-exchange-listed company, is evaluating an investment proposal to manufacture Product W33, which has performed well in test marketing trials conducted recently by the company's research and development division. Product W33 will be manufactured using a fully-automated process which would significantly increase noise levels from PV Co's factory. The following information relating to this investment proposal has now been prepared: Initial investment $2 million Selling price (current price terms) $20 per unit Expected selling price inflation 3% per year Variable operating costs (current price terms) $8 per unit Fixed operating costs (current price terms) $170,000 per year Expected operating cost inflation 4% per year The research and development division has prepared the following demand forecast as a result of its test marketing trials. The forecast reflects expected technological change and its effect on the anticipated life-cycle of Product W33. Year 1 2 3 4 Demand (units) 60,000 70,000 120,000 45,000 It is expected that all units of Product W33 produced will be sold, in line with the company's policy of keeping no inventory of finished goods. No terminal value or machinery scrap value is expected at the end of four years, when production of Product W33 is planned to end. For investment appraisal purposes, PV Co uses a nominal (money) discount rate of 10% per year and a target return on capital employed of 30% per year. Ignore taxation. Required:

(a) Calculate the following values for the investment proposal:

(i) net present value;

(ii) internal rate of return; and

(iii) return on capital employed (accounting rate of return) based on average investment.

(b) Briefly discuss your findings in each section of

(a) above and advise whether the investment proposal is financially acceptable.

(c) Discuss how the objectives of PV Co's stakeholders may be in conflict if the project is undertaken.