Which of the following is most accurate?

	a.	The target capital structure of a firm is the capital structure that minimizes the operating risk of the firm's assets.
	b.	The target capital structure of a firm is the capital structure that maximizes the tax shield created by debt.
	c.	The target capital structure of a firm is the capital structure that maximizes the price of the firm's stock.

Which of the following is an incremental cash flow for capital budgeting purposes?

	a.	Change in working capital
	b.	Market research costs
	c.	Sunk costs

A project's cash flows are assumed to be reinvested at what rate when using the traditional internal rate of return (IRR) capital budgeting technique?

	a.	project's internal rate of return
	b.	firm's opportunity rate return
	c.	market rate of return