5. Which of the following is NOT true regarding financial ratio analysis?

Select one:

a. The quick ratio of a company can only be equal to or less than its current ratio as the company's inventory balance is either zero or positive.

b. Market-to-book (M/B) ratio compares the market price of the company's shares to the company's book value of equity per share. The lower the M/B ratio, the less expensive the company's shares are.

c. If the short-term assets of a firm are equal to its current liabilities, the net working capital is zero and the current ratio is one.

d. Return on Equity (ROE) is a measure of a firm's growth opportunities.

6. A project costs $14 million and is expected to produce cash flows of $4 million a year for 15 years. The opportunity cost of capital is 20%. If the firm has to issue shares to undertake the project and issue costs are $1 million, what is the project's NPV?

Select one:

a. $3.0 million

b. $4.7 million

c. $3.7 million

d. $4.5 million