1. Which of the following can be expected to create value immediately and unconditionally?

I. Selling underperforming assets at more than their present value

II. Investing in additional research and development leading to a patent

III. Increasing the amount of financial leverage being carried by the firm.

A. I only

B. I and II only

C. I and III only

D. II and III only

E. I, II, and III

F. None of the above

2. Which of the following statements concerning existing projects is true?An existing project should be:

I. Continued when its continuing value is greater than both its liquidation and divestiture value.

II. Liquidated when its liquidation value is greater than its divestiture value.

III. Divested when its divestiture value is greater than both its continuing value and its liquidation value.

a.  I only

b. II only

c. I and II only

d.  I and III only

e.  II and III only

f.  I, II, and III