1. Companies use ____ in capital budgeting project analysis because ________. a- accounting profit; that is the total net income; b- after tax cash flow; that is what the owners would receive from the project and reinvest; c- accounting profit; that is what the owners would receive from the project and reinvest; d- after tax cash flow; that is the result of prudent accounting.

2. When borrowing money, you want to know the ____ interest rate because ____.a- nominal; it is the easiest to find; b- effective; it is the true cost of borrowing; c- risk free; that is what the government pays; d- funds; that is what you would pay the bank.

3. Cash available to pay out to the investors after the firm pays for new investments or additions to working capital is _____. a- a statement of cash flows; b- operating after tax cash flow; c- free cash flow; d- net income

4. An organization that raises money from investors and provides financing for individuals and businesses is a ___. a- factor; b- federal government regulatory unit; c- state government taxing authority; d- financial intermediary

5. In finance, 1 Point is ____ and Points are used by lenders to _____. a- a clause in the loan agreement; make loans more affordable for the borrower; b- used on a simple interest loan; improve the loan process; c- one percent; make more profit for the lender.