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1. What is the Degree of Combined Leverage (DCL) of a firm with a Degree of Operating Leverage (DOL) of 1.4, and Degree of Financial Leverage (DFL) of 1.2? It is: a. 2.6 b. 1.25 C. 1.68 d. 0.6 e. None of the above. V 0000 0 0000 !. What is Net Working Capital? It is: a. The difference between Current assets and current liabilities b. The sum of cash and Inventory minus long-term debt c. The difference between market price of stock and book value per share d. The spontaneous financing of current assets that flows from accounts payable e. None of the above. 16. Also if a firm has fixed costs of $30,000, variable cost per unit of $0.75, and a break-even point of 5,000 units, what is the firm's product price? Price = $_ Show Your Calculation 17. Of the three interest rate theories discussed in your text, which of them suggests that long. term interest rates are determined by the average of short-term rates expected over time that a long-term bond is outstanding? a. Expectations Hypothesis . b. Market Segmentation Theory C. Liquidity Premium Theory d. Market Average Theory e. None of the above. 18. The following are the expected l year T-bill rates of Atlantis for the next 4 years: 3%, 4%, 5%, and 6%. Drawing on your knowledge of the Theory of Interest Rate, calculate Atlantis' rate for 3 year securities? Show Your Calculation: - Which of the following is a definition of capital structure? a. It is a mix of debt to a firm's equity b. It is the ratio of current assets to long-term debt c. It is the ratio of retained earnings to net fixed assets d. It is the mix of cash to accounts payable e. None of the above

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