1. Corporations have a tax advantage over sole proprietorships and partnerships. A) True B) False 2. Which of the following is FALSE? A) Corporate bonds are riskier than U.S. Treasury bonds B) The rates on corporate bonds are higher than those on Treasury Bonds. C) Small company returns are lower than large company stocks D) None of the above 3. If two companies have the same revenues and the operating expenses, their net incomes will also be the same. A) True B) False 4. Flotation costs tend to be higher in private offers compared to public offers A) True B) False 5. Which of the following items found in the income statement can be used to connect that $ amount in a related item on the balance sheet? A) Cost of goods sold B) Accounts payable C) Depreciation expense D) Interest Expense 6. Deciding whether to expand a manufacturing plant is what type of decision? A) Working Capital decision B) Capital structure decision C) Capital budgeting decision D) Financing decision