1) A firm is evaluating a switch from a cash-only to a net 30 credit policy. The present value of the cost of switching is RM108,000. The contribution margin (price - variable cost) per unit of the firms product is RM60. The firm currently sells 900 units per month. If the required monthly return is 1.5% and the product's contribution margin is unchanged, what is the minimum number of units the firm must sell under the new policy to make the switch worthwhile?

Select one:

a. 1,100

b. 1,027

c. 927

d. 873

2) YZ companys EOQ is 65 units and sells 20 units every week. The carrying cost per unit per year is RM3. If there are 52 weeks in a year, how many orders are made by YZ in a year?

Select one:

a. 15 orders.

b. 16 orders.

c. 17 orders.

d. 14 orders.

3) If the reward-to-risk ratio of an asset is higher than that of the security market line (SML), then the price of the asset will _____ and its expected return will _____.

Select one:

a. fall; fall

b. fall; rise

c. rise; rise

d. rise; fall