QUESTION 15

How can a gold futures contract be used as a hedge against a potential decrease in the price of gold for a firm that uses gold in making computer chips?

		the company should sell gold futures contracts
		the company should buy gold futures contracts
		this would be a situation that shouldnt be hedged
		the company should lower the price it pays for gold

QUESTION 16

A ______ which of the following is a contract that requires the holder to buy or sell a stated commodity at a specified price at a specified time in the future.

		option
		convertible contract
		futures
		warrant

QUESTION 17

Edelman Electric Systems is considering a project that has the following cash flow and WACC data. What is the project's MIRR?
WACC:			10.00%
Year:			0	1	2	3
Cash flows:			-$800	$350	$350	$350
			8.62%
			9.58%
			10.64%
			11.82%
			13.14%

QUESTION 18

It is now June 2017 (in case you forgot). If producers can be found, the cost to stage the revival of Pirates of the Caribbean on Ice: The Revenge of the Daiquiri would be $30 million. This cost wont be incurred until 2019. The company will stage the show in 2020 and 2021, generating net cash inflows of $20 million each year. In 2022, the show will be cancelled at an overall net loss of $5,000,000. What is the IRR of this project?

		14.4%
		21.5%
		10.2%
		12.7%

QUESTION 19

Which of the following dividend policies would cause dividends per share to fluctuate the least?

		Constant Payout Ratio
		Constant Dollar
		Small regular plus special
		Residual Dividend Method