4. Debt service is A.interest payments plus repayment of debt principal. B.refinancing bonds with a lower interest rate. C.refinancing a bond with a higher interest rate. D.payment of bond interest only E.None of the above. 5. Which of the following is not included in the computation of operating cash flow? A.Earnings before interest and taxes OB.Interest paid C.Depreciation D.Current taxes E.All of the above are included. 8. The primary distinction between tangible and intangible assets is that A.intangible assets have a physical existence while tangible assets do not. B.intangible assets do not have a physical existence while tangible assets do. C.tangible assets do not show up on the balance sheet. DD.intangible assets do not show up on the balance sheet. Eintangible assets do not show up on the balance sheet. 9. If forecasted net income is $3,600 and the expected dividend is $1,098 and the tax rate is 34%, what is the retention ratio? A.0.198 B.0.3 C.0.7 D.0.802 E. None of the above. 12. Time preference refers to the fact that A.corporations match current assets with current liabilities to minimize the chance of bankruptcy. B.corporations match both current and long-term assets with current and long-term liabilities to minimize the change of bankruptcy. C.investors prefer current cash flows to future cash flows. D.investors seek to time cash flows to minimize tax liabilities. E.None of the above. 13. Which of the following will increase sustainable growth? A.Buy back existing stock B.Decrease debt. Cincrease profit margin. D.Increase asset requirement ratio. E.Increase dividend payout ratio. 2. Net capital spending is equal to net additions to net working capital. TE 3. Corporate securities are contingent claims because book valud can be negative. TEE 4. Now you have the following assets: Marketable securities, Cash, Fixed assets, Accounts receivable. Among them, Marketable securities is generally the least liquid asset. IEW HIR