1. Which is a typical project acceptance criterion that could be paired with several other criteria?

1. Profitability index > 1
2. Weighted average cost of capital > internal rate of return
3. net present value > 100 percent
4. Risk adjusted cost of capital > 0

2. Which of the following is always true if Company A has a higher net profit margin than Company B?

1. Company A has a higher percentage of cost of goods sold and operating expenses than Company B.
2. Company A has more favorable credit terms than Company B.
3. Company A generates more net income relative to its revenues than Company B.
4. Company B generates less EBIT relative to its revenues than Company A.

3. Which of the following shows the correct break-even quantity for a box of cereal if the line consumes $30,000 in fixed costs for a period and each box sells for $5 and has $2 in variable costs?

1. 75,000 boxes
2. $10,000
3. 10,000 boxes
4. $75,000

4. In acquiring DEF Company, ABC Company acquired a significant amount of goodwill. Their creditors believe that this goodwill and other nonphysical, nonfinancial assets could distort the company's true level of indebtedness. Which of the following ratios should the creditors use to avoid this problem?

1. Times interest earned
2. Long-term debt to capital
3. Debt to tangible net worth
4. Total liabilities to total assets