Question 1

Which one of the following would not be considered a caring cost associated with inventor?

Options :

A : Insurance costs.

B : Cost of capital invested in the inventory.

C : Cost of obsolescence.

D : Shipping costs

Answer: D

Question 2

Which marketing research instrument is based on follow-up questioning?

Options :

A : Articulate interviewing.

B : Customer prototyping.

C : Closed-end questions.

D : Laddering.

Answer: D

Question 3

Rex Company is considering an investment in a new plant which will entail an immediate capital

expenditure of $4,000,000. The plant is to be depreciated on a straight-line basis over 10 years to

zero salvage value. Operating income (before depreciation and taxes) is expected to be $800,000 per

year over the 10-year life of the plant. The opportunity cost of capital is 14%. Assume that there are

no taxes.What is the NPV for the investment?

Options :

A : $172,800

B : $(1,913,600)

C : $520,000

D : $362,400

Answer: A

Question 4

AA Company has purchased one share of QQ Company common stock and one put option. It has also

sold one call option. The options are written on one share of QQ Company common stock and have

the same maturity date and exercise price. The exercise price ($40) is the same as the share price.

Moreover, the options are exercisable only at the expiration date. Assuming the present value of the

exercise price is $36 and the value of the call is $4.50. the value of the put in accordance with the

put-call panty theorem is

Options :

A : $450

B : $400

C : $50

D : $0

Answer: C

Question 5

Which of the following factors is not typical of an industry that faces intense competitive rivalry?

Options :

A : Price-cutting

B : Large adverting budgets

C : Frequent introduction of new products

D : Inelastic demand

Answer: D