9) The president of Global Wholesalers would like to offer special sale prices to the firm's best customers under the following terms: 9) 1. The prices will apply only to units purchased in excess of the quantity normally purchased by a customer. 2. The units purchased must be paid for in cash at the time of sale. 3. The total quantity sold under these terms cannot exceed the excess capacity of the firm. 4. The net profit of the firm should not be affected. 5. The prices will be in effect for one week only. Given these conditions, the special sale price should be set equal to the A) marginal cost of materials only. B) average variable cost of materials only. C) marginal cost of all variable inputs. D) average cost of all variable inputs. E) sensitivity value of the variable costs. 10) 10) Isaac has analyzed two mutually exclusive projects that have 3-year lives. Project A has an NPV of $81,406, a payback period of 2.48 years, and an AAR of 9.31 percent. Project B has an NPV of $82,909, a payback period of 2.57 years, and an AAR of 9.22 percent. The required return for Project A is 11.5 percent while it is 12 percent for Project B. Both projects have a required AAR of 9.25 percent. Isaac must make a recommendation and justify it in 15 words or less. What should his recommendation be? A) Accept Project B and reject Project A based on the NPVs B) Accept Proiect A because it has the shortest payback period C) Accept both projects because both NPVs are positive D) Accept Project A and reject Project B based on their AARS E) Accept Project A because it has the lower required return 11) 11) Assume a project has cash flows of -$54,300, $18,200, S37,300, and $14,300 for Years 0 to 3, respectively. What is the profitability index given a required return of 12.6 percent? A) 1. 00B ).946 09.98D ) 1. 06E ) 1.02 12) - 12) Which one of the following will increase a bid price? A) A reduction in the firm's tax rate B) A decrease in the fixed costs C) A reduction in the networking capital requirement D) An increase in the required rate of return E) An increase in the salvage value