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1.Consider a standard project whose IRR is exactly 9%. Which of the following is true of the same projects NPV if the required rate of return is 9%?

a.The NPV is equal to 9

b.The NPV is less than 0 but greater than -9

c.The NPV is equal to -9

d.The NPV is equal to 0

e.The NPV is greater than 0 but less than 9

2.Assuming a purchase of $100 of products, what is the implicit interest rate in the credit terms of 1/2; net 70? Assume a 365 day year.

• a.1.00%
• b.2.00%
• c.3.33%
• d.5.54%

e. Greater than 25%

3.Your firm wishes to determine whether or not to extend credit to a customer who has ordered 100 boxes of product from your firm that you sell for $23 a box and which costs the firm $17 per box. Which of the following comes closest to the probability of paying that would make the firm indifferent to handing out the credit?

• a.7.0%
• b.10.0%
• c.23.4%
• d.30.0%
• e.73.9%