1. A firm requiring an input in the future for production can lock in the cost of this input by selling a futures contract.
True
False
2. If one takes into consideration the option to abandon the project in the future the NPV of the project at the beginning might be higher.
True
False
3. Builtrite's upper management has been comparing their books to industry standards and came up with the following question: Why is our operating profit margin higher than the industry standard and our earnings before taxes margin lower than the industry standard?
Builtrite has lower than average operating expenses
Builtrite has higher than average operating expenses
Builtrite has lower than average interest expense
Builtrite has higher than average interest expense