1. Striving to maximize the size of the firm is not considered the most theoretically correct objective for a financial manager to pursue. The reasons for this include the fact that while the pursuit of this objective can efficiently include the measurement of the risk taken in financial decisions, it does not allow consideration of the time value of money. True/False

2. To estimate the retained earnings balance on a pro-forma balance sheet, simply subtract preferred and common dividend payments from after-tax net income. True/False

3. Depreciation expense and accumulated depreciation provide the same information. The only difference between the two is that one is presented on the income or profit and loss statement while the other is presented on the balance sheet or statement of financial position. True/False

4. An increasing Debt/Assets ratio suggests that the firm is reducing financial risk. True/False

5. An increasing inventory turnover ratio is an indication of a decreasing position of liquidity. True False