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1. Explain the concept of cost of capital? Should a firm use the same cost of capital for all of its projects? Why or why not?

2. Which of the following statements is not correct regarding Chapter 7 of the Bankruptcy Act?

a. The debtor submits a debt repayment plan to the court that is designed to repay as much of the debt as possible.

b. Chapter 7 provides for an immediate liquidation of assets.

c. Petitioners seeking to file Chapter 7 must pass a "means" test.

d. Most of the bankrupt person's assets are given over to the bankruptcy trustee.

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