With the background ideas of using the cheapest source first and the impact of asymmetric​ information, the Pecking Order Hypothesis predicts which of the​ following? A. If external financing is​ required, firms will choose to issue the riskiest security​ first, starting with debt financing and using equity as a last resort. B. Firms prefer internal financing second to external financing. C. If external financing is​ required, firms should first seek equity financing. D. If external financing is​ required, firms will choose to issue the safest or cheapest security​ first, starting with debt financing and using equity as a last resort.

Asmall town wants to build some new recreational facilities. the proposed facilities include a swimming pool, recreation center, basketball court and baseball field. the town council wants to provide the facilities which will be used by the most people, but they face budget and land limitations. the town has $400,000 and 14 acres of land. the pool requires locker facilities which would be in the recreation center, so if the swimming pool is built the recreation center must also be built. also, the council has only enough flat land to build the basketball court or the baseball field. the daily usage and cost of the facilities (in $1,000) are shown below. which facilities should they build? facilityusagecost ($1,000)landswimming pool4001002recreation center5002003basketball court3001504baseball field2001005