7. Consider the following nine cash flow items: (1) borrowed funds, (2) repayment of principal, (3) debt interest, (4) working capital recovery, (5) working capital investment, (6) depreciation, (7) proceeds from sales of depreciable assets, (8) gains tax, and (9) capital investment. How many of these items belong to the category of investing activities? (

a) Three (b) Four (c) Five (d) Six

8. Which one of the following equations is incorrect about the relationship among market interest rate i, inflation-free interest rate i 0 , and inflation rate f?

(a) 1 + f = 1 + i 1 + i 0 (b) i = i 0 + f(1 + i 0 ) (c) i 0 = i f i + f (d) f = i i 0 1 + i

Above are two multiple choice questions and answers (a) through (d). please tell me which answer is correct