10. The choice of the proper mixture of debt and equity, used to finance a corporation, is also referred to as the A. capital budgeting decision. B. capital structure decision. C. investment decision. D. liquidity decision. 11. Mr. Free has $100 income this year and zero income next year. The market interest rate is 10 percent per year. If Mr. Free consumes $30 this year and invests the rest in the market, what will be his consumption next year? A. $50 B. $55 C. $77 D. $100 12. The present value of $100 expected two years from today at a discount rate of 6 percent is A. $112.36. B. $106.00. C. $100.00. D. $89.00. 13. If the annual interest rate is 12 percent, what is the two-year discount factor? A. 0.7972 B. 0.8929 C. 1.2544 D. 0.8065 14. The rate of return is also called the A. discount rate only. B. discount rate and hurdle rate only. C. discount rate, hurdle rate, and opportunity cost of capital. D. discount rate and opportunity cost of capital only.