1. Which of the following is true?

a. When a loan is amortized over a ten-year term, the amount of interest paid increases each year.

b. In preparing a statement of cash flows, the indirect method involves adjusting net income to reconcile it to net cash flows from operating activities.

c. An ordinary annuity is the annuity in which the payments or receipts occur at the beginning of each period.

d. All of the above

2. You are given the information of firm A and B for their performance evaluation. Firm A B Sales 25 22 EAT 6 6 Total Assets 50 40 Stockholder