Multiple Choice (4 pts each). 1. A firm has a net of $7,500,000, total profit margin of 15 percent on sales of $20,000,000. If the firm has total liabilities of assets of $22,500,000, and an after-tax interest cost on total debt of 5 percent, what is the firm's ROE? a. Less than 0.01 b. Between 0.01 and 0.03 e. Between 0.03 and 0.05 d. Greater than 0.05 e. Cannot be determined with this information 2. From 1926 to the present a. Asset classes with the lowest returns were the most risky b. Asset classes with the highest returns were the most risky c. The expected risk/return relationship did not hold d. Long-term government bonds performed about the same as Treasury . Need more information 3. Tyrell Corporation is considering a project with the following cash flows (in millions of dollars): Year Cash Flow 1 $1.0 2 1.5 3 2.0 4 2.5 The project has a simple payback period of exactly two years. The project's cost of capital is 12 percent. What is the project's internal rate of return? a. Less than 0% b. Between 0 and 10% c. Between 10 and 20% d. Greater than 20% e. Cannot be determined with this information