1. If the government Treasury bond rate were to increase to 6.5%, what would be the firm's cost of capital?
2. If the government Treasury bond rate were to increase to 6.5%, what would be the firm's cost of equity capital?
3. If the government Treasury bond rate were to increase to 6.5%, the firm's economic profit would...

• Remain unchanged
• Increase, but less than 100 million dollars
• Increase more than 100 million dollars
• Decrease, but less than 100 million dollars
• Decrease more than 100 million dollars

4 What change has a greater impact on the economic profit of the firm:

A 5% reduction in SG&A expense

B 5% increase in Sales

C 5% reduction in Cost of Goods Sold

D 5% reduction in Fixed Assets

E 5% reduction in Inventory

5. What change has a greater impact on the value of the firm (in the market value creation section):

a. A 5% reduction in SG&A expense

b. A 5% increase in Sales

c. A 5% reduction in Cost of Goods Sold

d. A 5% reduction in Fixed Assets

e. A 5% reduction in Inventory