War Eagle Distributing wants to determine the most efficient method of transporting its new product- The Charles Barkley Paperweight. This item has been offered for sale for several years, but Mr. Barkley's public persona and popularity have grown steadily, and the 6-year forecast calls for year 1 sales of 1,000 pallets, with year 2-6 sales increasing by 400 pallets each year. Estimated year 1 costs of two transportation options being considered are shown below. Mode A Mode B
Variable Costs
Transportation Costs $240,000 $270,000
Inventory Cost $100,000 $30,000
Packaging Costs $120,000 $30,000
Fixed Cost $160,000 $420,000
Total Cost $620,000 $750,000

What is the Point of Indifference (where the total cost of each option is equal) in number of pallets?
a. 1,400
b. 1,800
c. 2,000
d. 2,400
e. 2,800

You manage an equity fund with an expected risk premium of 10% and a standard deviation of 14%. the rate on treasury bills is 6%. your client chooses to invest $60,000 of her portfolio in your equity fund and $40,000 in a t-bill money market fund. what is the expected return and standard deviation of return on your client’s portfolio?

Which of the following statements is correct? a. two firms with identical sales and operating costs but with different amounts of debt and tax rates will have different operating incomes by definition. b. free cash flow (fcf) is, essentially, the cash flow that is available for interest and dividends after the company has made the investments in current and fixed assets that are necessary to sustain ongoing operations. c. retained earnings as reported on the balance sheet represent cash and, therefore, are available to distribute to stockholders as dividends or any other required cash payments to creditors and suppliers. d. if a firm is reporting its income in accordance with generally accepted accounting principles, then its net income as reported on the income statement should be equal to its free cash flow. e. after-tax operating income is calculated as ebit(1 - t) + depreciation.

Tl & co. is following a related-linked diversification strategy, and soar inc. is following a related-constrained diversification strategy. how do the two firms differ from each other? a. soar inc. generates 70 percent of its revenues from its primary business, while tl & co. generates only 10 percent of its revenues from its primary business. b. soar inc. pursues a backward diversification strategy, while tl & co. pursues a forward diversification strategy. c. tl & co. will share fewer common competencies and resources between its various businesses when compared to soar inc. d. tl & co. pursues a differentiation strategy, and soar inc. pursues a cost-leadership strategy, to gain a competitive advantage.