5. An effective interest rate is: rate of a loan which does not account for compounding The stated annual interest rate or a loan which does not account rest rate earned or charged which is affected by the number of compoundine b. The actual interest rate earned or periods. he frequency of compounding for any given interest level and time period d. None of the above Capital appreciation is: a. The portion of the profits the company keeps h when an investment is worth more when it is sold than when it was purchased c. An increase in liabilities d. None of the above 7. The three methods of evaluating large dollar multiyear investment decisions from Chapter 7 are: a. Payback, net present value and internal rate of reduction b. Payoff, net present value and internal rate of return c. Payback, net present value and internal rate of return d. Payback, net present variables and internal return rate 8. Spreadsheets are ideal for which method? a. NPV b. Payback C. IRR d. None of the above to determine. 9. The exact cost of capital is a. Difficult b. Easy c. Impossible d. Time consuming 10. A debenture is: a. A secured bond b. An unsecured bond c. Subject to harsh regulations d. Non existent 11. According to Fitch and S&P's bond ratings, which rating is highest? a. AAAA b. Aa cAAA d. BBB 12. The highest bond rating a health care provider can usually achieve is: a. AA or Aa b. BBB or Baa c. Aaa or AAA d. Ba or BB -term funds for -term needs. 13. An organization should borrow a. Long, short b. Short, long C. Short, short d. None of the above 14. Which of these is an intangible factor? a. History b. Reputation C. Strength of its board of directors d. All of the above 15. The authoritarian approach is often called a. Top-down spending b. Monopolistic practices c. Top-down budgeting d. Bottom-up strategizing 16. A program budget is an extension of the a. Line-item budget b. Line-category budget C. Line-ending budget d. Zero-based budget level of activity. 17. Static budgets use a a. Low b. Flexible C. Static d. High for the year. 18. A capital budget summarizes the major a. Costs b. Income c. Variances d. Purchases