1. _____________ are expenses that have already been paid and cannot be recovered.

1)	Depreciation
2)	Incremental cash flows
3)	Variable costs
4)	Sunk costs

2. Finance indicates that over the long-term the primary goal of managers of publicly-owned firms should be to:

1)	increase tax shields.
2)	minimize expected earnings per share.
3)	remove all chance of losses.
4)	maximize shareholder wealth (or maximize stock price).

2. Which of the following statements regarding financial ratio analysis are correct?

1)	Ratio analysis makes comparisons easier by standardizing numbers.
2)	It is always straightforward to choose firms for ratio comparison for large firms that operate different divisions across several different industries.
3)	Financial ratio comparisons are NOT impacted by seasonal and accounting differences across firms.
4)	Financial ratios cannot be compared across time.