1. Which of the following represents a capital structure (or financing) decision?
A. A decision to issue $25 million of bonds.
B. A decision to invest $25 million in the stock of another company.
C. A decision to buy a new accounts payable software package for $2 million.
D. A decision to write-off $3 million of accounts receivable.
E. A decision to introduce a just-in-time inventory system, which will reduce inventories by an estimated $10 million
2. A firm is reviewing a project with labor cost of $8.90 per unit, raw materials cost of $21.63 per unit and fixed costs of $8,000 per month. Sales are projected at 10,000 units over the three-month life of the project.
What are the total variable costs of the project.
A. $329,300
B. $297,300
C. $313,300
D. $305,300
E. $216,300