1. The inventory turnover ratio compares:

1. cost of goods sold to average inventory.
2. average receivables to average inventory.
3. average assets to average inventory.
4. current assets to average inventory.

2. The profitability index for a project costing $40,000 and returning $15,000 annually for four years at an opportunity cost of capital of 12 percent is:

1. 0.861
2. 0.320
3. 0.500
4. 0.139