2. In a year in which fixed costs are $500,000 and 89,000 units are produced, if total production costs are $2,725,000, what is the marginal cost per unit?

1. $22.00
2. 25.00
3. 89.00
4. 5.62
5. 30.62

3. If operating cash flow is $90,000 and net income is $34,000, then depreciation must be:

1. $56,000
2. 124,000
3. 34,000
4. 54,000
5. 128,000

4. All of the following are characteristics associated with positive NPV projects EXCEPT one. Which one?

1. Access to distribution channels
2. Product differentiation
3. The Stand Alone Principal
4. Favorable government policies
5. Economies of scale

5. The publisher of a small newspaper decides to start a new paper in addition to his current one. After a few weeks, he notices that circulation of the original paper has decreased. This is an example of

1. The time value of money
2. The stand alone principal
3. Variance
4. The Normal distribution curve
5. Erosion