If demand for a firm's products suddenly increases so that inventory decreases while sales increase, how will the firm's needs for net working capital react?

	Net working capital would decrease.
	Net working capital would increase.
	There would be no change in net working capital.
	Net working capital would first decrease, then increase slowly over time.

Suppose a linear probability model you have developed finds there are two factors influencing the past bankruptcy behavior of firms: the debt ratio and the profit margin. Based on past bankruptcy experience, the linear probability model is estimated as: PD_i = 0.20 (debt ratio) + 0.50 (profit margin) You know a particular firm has a debt ratio of 60 percent and a probability of default of 15 percent. Calculate the firm's profit margin.

Question 2 options:

	6.00 percent
	12.00 percent
	19.50 percent
	15.00 percent