Question 4 (1 point) Free cash flow is commonly referred to as a firm's: 1) Cash flow to stockholders. 2) Cash flow to creditors. 3) Cash flow from assets. 4) Net working capital. Question 5 (1 point) An example of a financial ratio that is intended to provide information about a firm's liquidity is: 1) Quick (acid-test) Ratio 2) Return on Assets 3) Receivables Turnover 4) Market-to-Book Ratio Question 6 (1 point) Ratios that measure a firm's financial leverage are known as ratios. 1) Long-term solvency 2) Short-term solvency 3) Profitability 4) Market value Question 7 (1 point) Net present value 1) is equal to the initial investment in a project O2) is simplified by the fact that future cash flows are easy to estimate 3) Requires the firm set an arbitrary cut-off point for determining whether an investment is acceptable 4) Compares project cost to the present value of the project benefits Question 8 (1 point) To find the ---- We subtract the cash flow from each year until the initial investment is paid off. 1) Net Present Value 2) Payback period 3) Internal rate of return 4) Profitability index Question 9 (1 point) Your firm needs to buy a metal stamping press. The CFO presents you with two analyses: one with an investment of $10,000 and expected cash flow of $5,000 for 4 years and another with an investment of $8,000 which will provide cash flow of $6,000 for 3 years. This is an example of a decision involving 1) Independent projects 2) Mutually exclusive projects 3) Positive NPV projects 4) Crossover projects Question 10 (1 point) Which of the following is generally true about a firm's cost of debt? 1) it is greater than the cost of equity. O2) It normally cannot be observed, directly or indirectly, in the marketplace. 3) It is equal to the yield to maturity on the firm's outstanding bonds. 4) It is equal to the coupon rate on the firm's outstanding bonds