A mutual fund has securities in its portfolio that are worth $196 million. The fund has borrowed $12.1 million to purchase securities on margin and has 28.5 million fund shares outstanding. What is the fund's net asset value (NAV) per share?

• A.6.20
• B.9.76
• C.6.45

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An analyst makes the following estimates about an income-producing property.
Annual gross potential rental income = $800,000 Annual property operating expenses = 200,000 Annual vacancy and collection losses = 125,000 Capitalization rate = 10% Expected rate of inflation = 4%
Using the direct capitalization approach, the property's estimated market value would be:

• A.$4,750,000
• B.$3,392,857
• C.$4,285,714

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The income elasticity is +2 and income increases by 20%. Sales were 5000 units, what will they be now?

• A.3000
• B.5500
• C.7000

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Refer to the graph below. If the government set the selling price equal to the marginal cost, the firm in the graph would:

• A.be making economic profits.
• B.be sustaining losses and would eventually go out of business.
• C.be making zero economic profits.

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Which of the following is NOT a disadvantage of the IRR method?

• A.It measures the expected rate of return from a project.
• B.It is more difficult to compute than NPV.
• C.It is affected by the scale and timing of project cash flows.

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