Which of the following statements is CORRECT?
A) The current cash flow from existing assets is highly relevant to investors.However,since the value of the firm depends primarily upon its growth opportunities,accounting net income projections from those opportunities are the only relevant future flows with which investors are concerned.
B) Two metrics that are used to measure a company's financial performance are net income and free cash flow.Accountants tend to emphasize net income as calculated in accordance with generally accepted accounting principles.Finance people generally put at least as much weight on free cash flows as they do on net income.
C) To estimate the net cash provided by operations,depreciation must be subtracted from net income because depreciation is a non-cash charge that has been added to revenue.
D) Interest paid by a corporation is a tax deduction for the paying corporation,but dividends paid are not deductible.This treatment,other things held constant,tends to discourage the use of debt financing by corporations.
E) If Congress changed depreciation allowances so that companies had to report higher depreciation levels for tax purposes in 2019,companies would have lower free cash flows in 2019.
Correct Answer:
Verified
Q67: Which of the following statements is CORRECT?
A)
Q68: A start-up firm is making an initial
Q75: Bauer Software's current balance sheet shows total
Q76: For managerial purposes,i.e. ,making decisions regarding the
Q78: Assume that Congress recently passed a provision
Q81: Over the years,O'Brien Corporation's stockholders have provided
Q82: Vasudevan Inc.recently reported operating income of $2.3
Q83: Byrd Lumber has 2 million shares of
Q84: Kwok Enterprises has the following income statement.How
Q85: During 2019,Bascom Bakery paid out $33,525 of
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents