49. Preferred shareholders' claims on assets and income of a firm come those of creditors those of common shareholders.

a) before; and also before

b) after; but before

c) after; and also after

d) equal to; and equal to

13 | P a g e

50. You are considering two mutually exclusive investment proposals, project A and project B. B's expected value of net present value is $1,000 less than that for A and A has less dispersion. On the basis of risk and return, you would say that

a) Project A dominates project B.

b) Project B dominates project A.

c) Project A is more risky and should offer greater expected value.

d) Each project is high on one variable, so the two are basically equal.

51. To increase a given present value, the discount rate should be adjusted

a) upward.

b) downward.

c) No change. d) constant