1. Which of the following securities is most liquid and has the least default risk?

a. 3-month CD

b. 1-month CD

c. Treasury bill

d. commercial paper

2. Consider a 6-year project with the following information: initial fixed asset investment = $400,000; straight-line depreciation to zero over the 6-year life; zero salvage value; price = $36; variable costs = $17; fixed costs = $140,000; quantity sold = 92,400 units; tax rate = 33 percent. How sensitive is OCF to changes in quantity sold? (Do not round your intermediate calculations.)

$0.08

$9.04

$12.73

$16.42

$14.51