A pro forma statement indicates that both sales and fixed assets are projected to
increase by 7 percent over their current levels. Given this, you can safely assume that
A. is projected to grow at the internal rate of growth.
B. is projected to grow at the sustainable rate of growth.
C. currently has excess capacity.
D. is currently operating at full capacity.
E. retains all of its net income.
Which one of the following transactions occurs in the primary market?
A. purchase of 500 shares of GE stock from a current shareholder
B. gift of 100 shares of stock to a charitable organization
C. gift of 200 shares of stock by a mother to her daughter
D. a purchase of newly issued stock from AT&T
E. IBM's purchase of GE stock
Jasper Metals is considering installing a new molding machine which is expected to
produce operating cash flows of $73,000 a year for 7 years. At the beginning of the
project, inventory will decrease by $16,000, accounts receivables will increase by
$21,000, and accounts payable will increase by $15,000. All net working capital will be
recovered at the end of the project. The initial cost of the molding machine is $249,000.
The equipment will be depreciated straight-line to a zero book value over the life of the