5.1. Self-liquidating loans satisfy the following condition(s): a. The term of the loan matches the economic life of the asset b. Returns generated from the asset cover the repayment obligations c. Revenues are generated before the scheduled loan payments are due d. All of the above 5.2. Operating loans are paid from a. Depreciation reserves b. Operating receipts/farm revenues c. Farm profits d. All of the above 5.3. All of the statements provided below are incorrect except for: a. Cost of debt capital is lower than cost of equity capital because of the lower risk that firm owners face relative to outside lenders b. Farm growth is measured as a ratio of retained earnings to equity capital c. Increasing leverage contributes to farm growth when farm profitability is less than the cost of debt capital d. Farm growth is measured as a ratio of profits to debt capital 5.4. Other things equal, an increase in the rate-of-return on assets (r): a. Can slow down firm growth b. Can contribute to firm growth c. Has no effect on firm growth d. Has ambiguous effects on firm growth with the effect depending on firm leverage 5.5. All of the statements provided below are correct except for: a. Interest component of amortized loan payments declines over time b. Higher leverage makes it possible for firms to grow more rapidly c. Optimal leverage ratio reflects a capital structure that ensures a minimum weighted average cost of capital d. People have positive time preferences, i.e., $1 available tomorrow is worth less today