1. The difference between an NPV break-even level of sales and an accounting break-even level of sales is the:
A) Consideration of opportunity cost
B) Consideration of interest expense
C) Allowance of the sales level to vary in response to changes in demand
D) Inclusion of income taxes
2. The variance of an investment's returns is a measure of the:
A) volatility of the rates of return
B) Probability of a negative return
C) historic return over long time periods
D) average value of the investment
3. GE Transportation just sold locomotives to a Chinese importer. The payment of $80 million is due in six months, then
a) GE has a transaction exposure of A/P in the amount of $80 million
b) GE has a transaction exposure of A/R in the amount of $80 million
c) GE does not have transaction exposure.
d) GE does not have economic exposure.