1. The flow-to-equity (FTE) approach in capital budgeting is defined to be the:

a. Discounting all cash flows from a project at the overall cost of capital.

b. Scale enhancing discount process.

c. Discounting of the levered cash flows to the equity holders for a project at the required return on equity.

d. Dividends and capital gains that may flow to a shareholders of any firm.

e. Discounting of the unlevered cash flows of a project from a levered firm at the WACC.

2. The acronym APV stands for:

a. Applied present value.

b. All purpose variable.

c. Accepted project verified.

d. Adjusted present value.

e. Applied projected value.