1. A firm needs external Financing to support increases in operations if:
a. the firm is operating at full capacity.
b. the firm is not accounting for financing feedbacks.
c. the firm has a large amount of spontanously generated funds.
d. the firm is achieving economics of scale.
e. the firm is operating at the breakeven point.
2. BarLey Inc. recently borrowed $125,000 from its bank at a simple interest rate of 12 percent. The loan is for one year and, according to the loan agreement, the interest should be added to the amount borrowed and the total amount to be repaid in monthly installments. The loan's monthly payments are:
a. $11,667.
b. $12,222.
c. $11,111.
d. $11,997.
e. $12,677.