17. The cost of capital for a(n) _________________ is referred to as the unlevered cost of capital.

corporate shareholder

governmental entity

private entity

all-equity firm

private individual

18.

The discount rate assigned to an individual project should be based on: I. an average of the firm's overall cost of capital for the past five years. II. the current risk level of the overall firm. III. the firm's interest rate for a levered firm. IV. the actual sources of funding used for the project. V. none of the above statements is correct.

III and V only

V only

II only

I only

III and IV only

19.

Pro forma financial statements for a proposed project should: I. be compiled on an aggregate basis. II. include all the incremental cash flows related to the project. III. generally exclude interest expense. IV. exclude all project-related fixed asset acquisitions and disposals.

I, II, III, and IV

II and III only

II, III, and IV only

I and II only

I, II, and IV only