Presented below are terms preceded by letters (a) through (e) and followed by a list of definitions 1 through 5. Match the letter of the terms with the definitions. Use the space provided preceding each definition.

(a) Break-even time (b) Profitability index (c) Net present value (d) Cost of capital (e) Annuity

___ (1) Present value of net cash flows divided by initial investment. ___ (2) A series of cash flows of equal dollar amount over equal time periods. ___ (3) The discounted future net cash flows from an investment at the required rate of return, minus the initial investment. ___ (4) A measure of the expected time until the present value of the net cash flows from an investment equals the initial investment. ___ (5) An average of the rate the company must pay to its lenders and investors.