1. Which financial statement is best used to answer the question, 'How profitable is the business? A. Balance sheet B. Statement of shareholder's equity C. Income statement D. Accounts receivable aging schedule 2. Which of the following is the rate of return that must be earned on preference shareholders' investment in order to satisfy their required rate of return? A. Cost of debt B. Cost of preference shares C. Risk of premium D. Divisional WACC 3. Black Diamond Ambulance can purchase a new ambulance for $200,000 that will provide an annual net cash flow of $50,000 per year for five years. Calculate the NPV of the ambulance if the required rate of return is 9%. (Round your answer to the nearest $1.) A. $50,000 B. $5,061 C. $5,517 D. $5,571 I 4. The yield to maturity on a bond [blank]. A. is fixed in the indenture B. is lower for higher-risk bonds C. is the required return on the bond D. is generally equal to the coupon interest rate 5. Which of the following is not included in the Initial investment period? A. Incremental revenue B. Cost of equipment C. Cost of installing equipment D. Investment in working-capital requirements