1. Bob's Toys has a fixed asset turnover rate of 1.2 and a total asset turnover rate of .84. Gerold's Toys has a fixed asset turnover rate of 1.1 and a total asset turnover rate of .96. Both companies have similar operations. Bob's Toys:
a. is using its fixed assets less efficiently than Gerold's Toys.
b. has $.84 in total assets for every $.96 Gerold's has in total assets.
c. is using its total assets more efficiently than Gerold's Toys.
d. is generating $1.20 in net income for every $1 in net fixed assets.
e. is generating $0.84 in sales for every $1 in total assets.
2. Suppose a project costs $390 and produces cash flows of $100 over each of the following six years. What is the IRR of the project?
a. There is not enough information; a discount rate is required
b. 18.6%
c. 24.3%
d. 16.5%
e. 13.9%