1. Amelia is considering a loan in the amount of $25,000 for 5 years. The loan will be repaid in one lump sum at the end of the loan term. Amelia should choose the loan with which of the following feature to pay the least interest?

A. 5 percent interest, compounded annually

B. 5.5 percent simple interest

C. 5.5 percent interest, compounded annually

D. 5 percent simple interest

E. 7 percent interest, compounded annually

2.

A companys cash flow to shareholders would decrease due to which of the following?

I. Paying dividends

II. Issuing new stock

III. Repurchasing shares

IV. Capital investments

A. I only

B. I and II

C. II only

D. III only

E. I, II, and III

3.

Repaying a short-term bank loan would have which of the following effects on a firms current ratio (assume that net working capital is greater than one)?

A. Decrease the current ratio

B. No change to the current ratio

C. Increase the current ratio

D. Both increase and decrease the current ratio virally

E. All of the above