UOP FIN 571 Complete Week 3 UOP

36 days
Multiple Choice Question 80
Ticktock Clocks sells 10,000 alarm clocks each year. If the total cost of placing an order is $65 and it costs $85 per
year to carry the alarm clock in inventory, use the EOQ formula to calculate the optimal order size.
26,154 clocks
24 clocks
15,294 clocks
161 clocks
Multiple Choice Question 49
The asset substitution problem occurs when
managers substitute less risky assets for riskier ones to the detriment of equity holders.
managers substitute riskier assets for less risky ones to the detriment of bondholders.
managers substitute less risky assets for riskier ones to the detriment of bondholders.
managers substitute riskier assets for less risky ones to the detriment of equity holders.
Multiple Choice Question 53
M&M Proposition 1: Dynamo Corp. produces annual cash flows of $150 and is expected to exist forever. The
company is currently financed with 75 percent equity and 25 percent debt. Your analysis tells you that the
appropriate discount rates are 10 percent for the cash flows, and 7 percent for the debt. You currently own 10
percent of the stock.
How much are your cash flows today?
$4.50
$12.38
$150
$15