1. ____________ is the minimum required rate of earnings or the cut off rate of capital expenditure.

A) Cost of capital.
B) Working capital
C) Equity capital.
D) None of the above.



2. The project can be selected if its profitability index is more than ______.

A) 1%.
B) 3%.
C) 5%.
D) 10%.



3. To increase the given present value, the discounted rate should be adjusted

A) Upward.
B) Downward
C) No change.
D) Constant.



4. ____________ of different sources of capital influences capital structure.

A) Restrictive covenants.
B) Tax advantage.
C) Cost of capital.
D) Trading on equity.



5. Financial leverage refers to the rate of change in earnings per share for a given change in earnings ___________________.

A) Before tax.
B) Before interest
C) Before interest and tax
D) After interest and tax