problem1:  A firm is conducting an analysis of trends over time and discovers that its inventory turnover has declined. This may be due to:

[A] an increase in inventory purchases.

[B] a decrease in inventory purchases.

[C] an increase in sales.

[D] an increase in cost of goods sold.

problem2:  Common stockholders are most concerned with:

[A] The size of the firm's beginning earnings per share

[B] The risk of the investment

[C] The spread between the return generated on new investments and the investor's required rate of return

[D] The percentage of profits retained

problem3:  The average cost associated with each additional dollar of financing for investment projects is:

[A] Risk-free rate

[B] Beta

[C] The incremental return

[D] The marginal cost of capital

problem4:  If current market interest rates rise, what will happen to the value of outstanding bonds?

[A] It will remain unchanged

[B] It will rise

[C] It will fall

[D] There is no connection between current market interest rates and the value of outstanding bonds

problem5: Investment risk is:

[A] The probability of achieving a return less than expected.

[B] The probability of achieving a standard deviation less than expected.

[C] The probability of achieving a return greater than expected.

[D] The probability of achieving a beta coefficient less than expected.