1. Which of the following securities is most liquid and has the least default risk?
a. 3-month CD
b. 1-month CD
c. Treasury bill
d. commercial paper
2. Consider a 6-year project with the following information: initial fixed asset investment = $400,000; straight-line depreciation to zero over the 6-year life; zero salvage value; price = $36; variable costs = $17; fixed costs = $140,000; quantity sold = 92,400 units; tax rate = 33 percent. How sensitive is OCF to changes in quantity sold? (Do not round your intermediate calculations.)
$0.08
$9.04
$12.73
$16.42
$14.51