Which statement is FALSE when discussing sunk costs and opportunity costs?

		Sunk costs should be included in a project's incremental cash flows.
		Sunk costs are cash outlays that have already been made (past outlays) and therefore have no effect on the cash flows relevant to a current decision.
		Opportunity costs are cash flows that could be realized from the best alternative use of an owned asset.
		Opportunity costs should be included as cash outflows when one is determining a project's incremental cash flows.

Peter is considering purchasing the stock of Coca Cola because he really loves the taste. What should he be willing to pay for Coca Cola today if it is expected to pay a $8.90 dividend in one year and he expects dividends to grow at 1% indefinitely? Peter requires a 7% return to make this investment.

		$148.33
		$127.14
		$149.82
		$111.25

"Dodo Inc has an annual sales of approximately $3,750,000, and the company is operating 250 days per year. Calculate the resources required to support the firm's cash conversion cycle of 30 days."

		"$450,000"
		"$500,000"
		"$312,500"
		"$550,000"

Personal income is affected by three key factors. Which is NOT one of these three factors?

		Profits from speculating in the stock market
		Your income's life cycle
		Education
		Your career

A company has the following capital structure: 30% debt, 60% common equity & 10% preferred equity. The estimated after-tax cost of debt, cost of common equity and cost of preferred equity is 6%, 12% & 10% respectively. What is the weighted average cost of capital for the company?

		10.0%
		27.0%
		6.0%
		21.0%

"James & Co. estimated $140,000 for its revenue and $80,000 for its expenses with the current equipment. If the company invest in a new equipment, the revenue will increase by 35% while the expenses remain the same. Calculate the incremental cash inflow resulting from the proposed new equipment."

		"$327,000"
		"$220,000"
		"$208,000"
		"$339,000"

Bob Inc. has $1 million revenue and $850,000 expenses. If the company invest in a new equipment, the revenue will increase by 20% while expenses will increase by 8%. Calculate the operating cash inflow for the new equipment:

		$112,000
		$282,000
		$150,000
		$2,118,000

Which factor below DO NOT affect the coupon interest rates when corporations issue bonds?

		Bond rating of the issuing corporation
		Cost of funds in the capital market
		Maturity of the bond
		Working capital of the issuing corporation

A firm has a cash conversion cycle of 60 days and average collection period of 40 days. The firm's operating cycle is ________ days:

		20
		100
		50
		Cannot be determined

Peter is considering purchasing the stock of Coca Cola because he really loves the taste. What should he be willing to pay for Coca Cola today if it is expected to pay a $8.90 dividend in one year and he expects dividends to grow at 1% indefinitely? Peter requires a 7% return to make this investment.

		$148.33
		$127.14
		$149.82
		$111.25