An effective operations unit is one that promises the maximum efficiency or engineering perfection independent of the strategy of the business overall

Assume that Fake Stone, Inc. is operating at full capacity. Also assume that all costs, net working capital, and fixed assets vary directly with sales. The debt-equity ratio and the dividend payout ratio are constant. What is the pro forma net fixed asset value for next year if sales are projected to increase by 7.5 percent?

A. $19,800 B. $21,070 C. $23,600 D. $24,240 E. $26,810

By changing a firm's capital structure to one more optimal, a firm may be able to

A) reduce its cost of capital. B) increase its value. C) find that more of its potential projects are financially attractive due to lower capital costs. D) find that all of the above are true.