Table 14.2

Flum Packages, Inc.

Assets

Liabilities & Equity

Current assets $12,000

Current Liabilities $ 5,000

Fixed assets 18,000

Long-term debt 12,000

Equity 13,000

Total $30,000

Total $30,000

27) The company earns 5 percent on current assets and 15 percent on fixed assets. The firm's current liabilities cost 7 percent to maintain and the average annual cost of long-term funds is 20 percent.

The firm's initial net working capital is ________. (See Table 14.2)

A) $ 5,000. B) $10,000. C) $7,000. D) -$ 5,000.

28) The beta of the market

A) is less than 1. B) is greater than 1.

C) is 1. D) cannot be determined.