1. Depreciation expense: A) is not a true expense B) represents a cash outflow on the cash flow statement C) is deducted from net income D) is a tax deductible non-cash expense

2. Which of the following statements is (are) true for a risk averse investor? A) If two investment alternatives have equal returns, choose the one with lower risk. B) If two investment alternatives have equal risk, choose the one with lower return. C) Both of the above statements are true. D) Neither of the above statements are true.

3. Which of the following is a use of cash that would appear on the statement of cash flows? A) increase in accumulated depreciation B) purchase of marketable securities C) receipt of interest income D) decrease in accounts receivable