1. All else equal, a firm that purchases raw materials on credit will experience:
A a decrease in trade credit with a given increase in purchases
B no change in trade credit with a given increase in purchases
C an increase in trade credit with a given increase in purchases
D no change in trade credit with a given decrease in purchases
E an increase in trade credit with a given decrease in purchases
2. A firm should continue to invest in capital budgeting projects until its marginal cost of capital is:
A equal to the net present value (NPV) of the last project purchased
B equal to the internal rate of return (IRR) of the first project purchased
C equal to the marginal return generated by the last project purchased
D equal to the cash generated by the last project purchased
E equal to the weighted average cost of all the projects purchased