Elinore is asked to invest $5100 in a friend's business with the promise that the friend will repay $5610 in one year. Elinore finds her best alternative to this investment, with similar risk, is one that will pay her $5508 in one year. U.S. securities of similar term offer a rate of return of 12%. What is the opportunity cost of capital in this case? a. 7% b. 8% c. 9% d. 10% By how much must a firm reduce its assets in order to improve ROA from 10% to 12% if the firm's profit margin is 5% on sales of $4 million? a. $240,000 b. $333, 333 c. $400,000 d. $516, 167 Which of the following will increase a firm's times interest earned ratio? a. An increase in debt b. A decrease in cost of goods sold c. An increase in interest expense d. A decrease in net income A small foundry agrees to pay $220,000 two years from now to a supplier for a given amount of coking coal. The foundry plans to deposit a fixed amount in a bank account every three months, starting three months from now, so that at the end of two years the account holds $220,000. If the account pays 12.5% APR compounded monthly, how much must be deposited every three months? a. $24, 602 b. $27, 063 c. $29, 523 d. $31, 983