Marvec needs to replace an extruder and two replacements look good. Extruder A costs $102,000 and has a 10-year life. Extruder B costs only $56,000, but its expected life is 6 years. Extruder A will generate net cash flows of $17,600 per year for 10 years and B will generate net cash flows of $13,800 per year for 6 years. If Marvec's cost of capital is 11%, which extruder should be chosen and what is its NPV? Use equivalent annual annuities.

	a.	Extruder A, $280
	b.	Extruder B, $2,388
	c.	Extruder B, $564
	d.	Extruder A, $1,646

The decision by the Municipal Transportation Authority to either refurbish existing buses, to buy new large buses, or to supplement the existing fleet with mini-buses is an example of ____.

	a.	independent projects
	b.	contingent projects
	c.	separable projects
	d.	mutually exclusive projects

Leasing accounts for more than ____ percent of all business investment in equipment.

	a.	50
	b.	25
	c.	90
	d.	10

The ____ is the ratio of ____ to the ____.

	a.	standard deviation; covariance; expected value
	b.	coefficient of variation; systematic risk; expected value
	c.	covariance; expected value; standard deviation
	d.	coefficient of variation; standard deviation; expected value

The optimal capital budget is determined by comparing the expected project returns to the company's ____.

	a.	cost of equity schedule
	b.	optimal opportunity curve
	c.	computed break points
	d.	marginal cost of capital schedule