FIN 575 Final Exam 2017 Answers | FIN/575 Project Budget and Finance

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21. An investment in a project should be undertaken only if the expected
return is greater than the
• NPV
• WACC
• payback method
• economic value added
22. Brenda Smith, Inc. had a gross profit margin (gross profits ÷ sales) of
25% and sales of $9.75 million last year. Seventy-five percent of the firm’s
sales are on credit and the remainder are cash sales. Smith’s current
assets equal $1,550,000, its current liabilities equal $300,000, and it has
$150,000 in cash plus marketable securities. If Smith’s accounts receivable
are $562,500, what is its average collection period?
• 25 days
• 32 days
• 28 days
• 14 days