1) What is maturity premium for cost of financial capital? a. Premium one would face in the absent of inflation, illiquidity and other external factors b. Premium required to compensate the lender for the probability that a borrower will stop making payments c. Premium charged when a debt instrument cannot be converted to cash quickly at its existing value d. Premium that reflects increased uncertainty associated with long-term debt

2)

Which one of the below defines gross profit margin?

a. It is used to determine how much profit is generated by each dollar in net sales.

b. It is used to determine how much each dollar of sales generates in operating income.

c. It provides us with how much the firm earned on each dollar in sales after paying all obligations including interest and taxes.

d. None of the above.

3) What is the difference between classified and comparative balance sheets? a. They distinguish between cash and non-cash revenue. b. They distinguish between current and long-term assets and liabilities. c. They distinguish between gross and net profit margins.

d. None of the above.