Suppose you own shares in a "C" corporation. The earnings per share for this corporation are $4 per share before taxes. The dividends will be distributed to the shareholders once the taxes are paid fully. The dividend is income to you, so you will then pay taxes on these earnings. The corporate tax rate is 35% and your tax rate on dividend income is 15%. The effective tax rate on your share of the corporations earnings is closest to:

Question 2 options:

	A) 5%
	B) 15%
	C) 25
	D) 35%
	E) 45%

Saudi Arabian Crude Oil (ARAMCO)	$71.75/Bbl
West Texas Intermediate Crude Oil (WTI)	$73.06/Bbl

As an oil refiner, you are able to produce $76 worth of unleaded gasoline from one barrel of Saudi Arabian Crude Oil (ARAMCO) crude oil. Because of its lower sulfur content, you can produce $77 worth of unleaded gasoline from one barrel of West Texas Intermediate (WTI) crude. Another oil refiner is offering to trade you 10,150 Bbls of Saudi Arabian Crude Oil (ARAMCO) crude oil for 10,000 Bbls of West Texas Intermediate (WTI) crude oil. Assuming you currently have 10,000 Bbls of WTI crude, the added benefit (cost) to you if you take the trade is closest to:

Question 3 options:

	A) $3400
	B) $4100
	C) $3908
	D) $1400
	E) None of the above

uppose your parents have a restaurant in Ottawa South. They are planning to sell the restaurant and enjoy the retirement life in Florida. Soonest they discuss the idea of selling their business, one of your uncles offers to buy the business for $ 350,000 whenever your parents are ready to retire. The offer sounds good and your parents asks your opinion regarding the following three options: 1. Sell the restaurant now and retire. 2. Hire someone to manage the restaurant for the next year and retire. This will require the owner to spend $50,000 now, but will generate $100,000 in profit next year. In one year the owner will sell the restaurant. 3. Scale back the restaurant's hours and ease into retirement over the next year. This will require the owner to spend $40,000 on expenses now, but will generate $75,000 in profit at the end of the year. In one year the owner will sell the restaurant.

Which option has the highest NPV if the discount rate is 15%?

Question 4 options:

	A) #1 with an NPV of approximately $305,000
	B) #2 with an NPV of approximately $341,300
	C) #3 with an NPV of approximately $329,570
	D) #2 with an NPV of approximately $400,000
	E) #1 with an NPV of approximately $350,000