A mining firm has recently discovered new reserves worth $600 million. If the cost of developing these reserves is $700 million, what is the payoff to the firm if it has decided to develop these reserves:

	a.	$600 million
	b.	$100 million
	c.	$1,100 million
	d.	-$100 million
	e.	none of the above

If Sales were $8,000,000 and $10,000,000 in 2019 and 2020 respectively, ATO was 4 and 2.5 in 2019 and 2020 respectively, NFOs were $400,000 and $600,000 in 2019 and 2020 respectively, what was the change in CSE from 2019 to 2020?

	a.	$2,000,000
	b.	$2,400,000
	c.	$1,800,000
	d.	$2,200,000
	e.	none of the above

Year 0 sales of XYZ firm are $124.9 million. Sales are expected to grow at 6% from their year 0 level. Core operating profit margin is expected to be 8%. Asset turnover on beginning of period NOA is expected to be 1.8. The payout ratio is expected to be 40%. The required return on operations is 10% and the after tax cost of debt is 4%. The following forecasts were made:

What is the expected NOA in year 3?

	a.	$77.97 million
	b.	$82.64 million
	c.	$87.60 million
	d.	$74.42 million
	e.	none of the above

Year 0 sales of XYZ firm are $124.9 million. Sales are expected to grow at 6% from their year 0 level. Core operating profit margin is expected to be 8%. Asset turnover on beginning of period NOA is expected to be 1.8. The payout ratio is expected to be 40%. The required return on operations is 10% and the after tax cost of debt is 4%. The following forecasts were made:

What is the expected residual operating income in year 2?

	a.	$3.15 million
	b.	$3.43 million
	c.	$3.64 million
	d.	$3.85 million
	e.	none of the above