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1. The NPV method is based on the assumption that projects' cash flows are reinvested at the project's risk-adjusted cost of capital.

a. True

b. False

2. A "reverse split" reduces the number of shares outstanding.

a. True

b. False

3. Your firm's cost of goods sold (COGS) average $2,000,000 per month, and it keeps inventory equal to 50% of its monthly COGS on hand at all times. Using a 365-day year, what is its inventory conversion period?

a. 13.7 days

b. 14.0 days

c. 15.2 days

d. 15.7 days

e. 14.8 days

Financial Management, Finance

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