Please write the letter T or F is the below statement are true or false. 1. Using the indirect method, the operating activities section of the cash flow statement is constructed starting with net income and adjusting it to a cash basis.

2. Short-term highly liquid investments such as treasury bills which may be included on the balance sheet within marketable securities will be considered cash in preparation of the cash flow statement.

3. A cash flow statement will be divided into separate sections reporting cash flows resulting from operating activities, investing activities, and financing activities.

4.A low debt-to-equity ratio is usually viewed as providing more protection to creditors.

5. In calculating earnings per share, net income is reduced by the amount paid out as dividends to the owners of the preferred shares.

6. Return on investment can provide information as to the benefits that managers can obtain by reducing their investments in current and fixed assets.

7. Support departments within an organization such as information technology, cannot be evaluated as profit centres as they have no external sales revenues.

8. When using internal rate of return to evaluate investment projects, if the internal rate of return is less than the required rate of return, the project should be accepted.

9. One of the strengths of the simple rate of return method is that it considers the time value of money in computing the return on an investment project.

10. The discount rate used in net present value analysis should normally match or exceed the company's minimum required rate of return.

11. A post audit of an investment project can provide feedback as to the quality of an entity's capital budgeting process.

12. For a given level of sales, a low contribution margin ratio will produce less net income than a high contribution margin ratio.

13. If the fixed expenses increase in a company, and all other factors remain unchanged, then one would expect the margin of safety to decrease.

14. In CVP analysis there is an assumption that selling prices of products or services will change as volumes change.

15. The usual starting point in budgeting for a for-profit organization is to make a forecast of cash receipts and cash disbursements.