1. Holding everything else constant, increasing fixed costs ________ the firm's break-even point.

   1. increases the covariance of

   2. decreases

   3. does not affect

   4. increases

1. The presence of ________ in perfect capital markets makes the total value of the firm independent of its capital structure under the NOI approach.

   1. bankruptcy costs

   2. taxes

   3. arbitrage

   4. institutional investors