Pls give all MCQs Answer

1. A weakness of the payback period is that it disregards ____.

	a.	projects with shorter payback periods
	b.	start-up costs
	c.	the time value of money
	d.	cash flows during the payback period

2.

____ can be achieved by investing in a set of securities that have different risk-return characteristics.

	a.	Capital Asset pricing
	b.	Indexing
	c.	Diversification
	d.	Asset allocation

3.

TCA Cable has fixed operating costs of $2.6 million, and its variable cost ratio is 0.30. TCA has $4.0 million in bonds outstanding with a coupon interest rate of 12%. TCA has 1.0 million common shares and 1,000,000 shares of $1.75 preferred stock outstanding. Total revenues for TCA Cable are $14.2 million. If TCA has a marginal tax rate of 40%, what is its degree of combined leverage?

	a.	1.9
	b.	2.5
	c.	2.1
	d.	1.0

4. Cryo-vac expects sales to increase 20% next year from the current level of $5,000,000. The firm has current assets of $1,000,000 and fixed assets of $1,500,000. Cryo-vac has current liabilities of $750,000, of which $300,000 are in notes payable. What additional financing will Cryo-vac need to support the expected sales increase if its profit margin is 8% and the firm expects to pay out $200,000 in dividends? An increase in net fixed assets of $300,000 will be required.

	a.	$70,000
	b.	$130,000
	c.	Surplus of $70,000
	d.	$270,000

5.

Cryo-vac expects sales to increase 20% next year from the current level of $5,000,000. The firm has current assets of $1,000,000 and fixed assets of $1,500,000. Cryo-vac has current liabilities of $750,000, of which $300,000 are in notes payable. What additional financing will Cryo-vac need to support the expected sales increase if its profit margin is 8% and the firm expects to pay out $200,000 in dividends? An increase in net fixed assets of $300,000 will be required.

	a.	$70,000
	b.	$130,000
	c.	Surplus of $70,000
	d.	$270,000

6.

Net working capital is the _____.

	a.	sum of the firm's current assets plus the firm's current liabilities
	b.	difference between the company's current assets and fixed assets
	c.	difference between the company's current assets and current liabilities
	d.	firm's fixed assets plus the firm's long-term liabilities

7.

Net working capital is the _____.

	a.	sum of the firm's current assets plus the firm's current liabilities
	b.	difference between the company's current assets and fixed assets
	c.	difference between the company's current assets and current liabilities
	d.	firm's fixed assets plus the firm's long-term liabilities

8.