1-1

.Retail companies would be distinguished by their shorter receivable collection periods.

TrueFalse

1-2. A firm's suppliers would be very interested in the firm's current ratio.

TrueFalse

1-3. Finance adds back depreciation and amortization in its measure of economic returns because depreciation is not a cash expense.

TrueFalse

1-4. When one share of Apple stock is being traded at $150, the stock market believes that you can always sell a share of Apple stock for at least $150.

TrueFalse

1-5. Your firm built a new plant two years ago with an investment of $100 million, which had an expected present value of $150 million, considering the plant's future cash flows. Today, it has become apparent that the product manufactured at the plant is not selling as well as expected, and the present value of future cash flows at that point is only worth $50 million. Your firm should shut down the plant because the net present value is now negative.

TrueFalse

1-6. Free cash flow is relevant to all capital providers and is not tax adjusted.

TrueFalse