5. Multiple Choice Questions - Finance: 3 marks (i) A typical feature of investments is: (a) They involve risk and uncertainty due to the inability to accurately predict future revenues and costs. (b) They normally require a minimal cash outlay in the beginning. (c) They are easy to reverse without a substantial loss of funds. (cl) They rarely span long periods of time. (1.5 marks) (ii) Why is cost of debt lower than cost of equity? (a) Interest cost is tax deductible. (b) Debt has to be repaid. (c) Lenders have priority claims over assets in bankruptcy. (cl) All of the other options. (1.5 marks)