1. If an investment project would make use of land which the firm currently owns, the project should be charged with the opportunity cost of the land.
2. When calculating the cash flows for a project, you should include interest payments in the capital budeting analysis.
3. Financial risk refers to the extra risk stockholders bear as a result of the use of debt as compared with the risk they would bear if no debt were used
4. Holding everything else constant, an increase in the corporate tax rate would encourage a company to raise its target debt ratio.

Questions 1 through 4 are true or false