71. Project A has NPV of $200,000 while project B has NPV of $500,000. If the two projects are independent, a. Both projects should be accepted b. Only project B should be accepted c. Cannot be determined; need more information to decide 72. The most powerful policy making body of the Fed is the a. Governors of the Fed b. Presidents of the Federal Reserve district banks U.S. Treasury d. Federal Open Market Committee (FOMC) 73. The NPV profile of a project shows at various discount rates a. PV of cash flows b. NPV of cash flows c. IRR d. P1 74. A similarity between bond and preferred stock is that both a. are issued by the same company b. have fixed cost of financing c. has financing cost which is tax deductible 75. The rate changed by depository institutions on loans to the most creditworthy customers is called a. Bank lending rate b. Special lending rate c. Discount rate d. Prime lending rate e. Sub-prime rate 76. As a company becomes more risky, value of its stock, according to Gordon's model. a. increases b. decreases c. does not change