Question 5 3 pts Why are depreciation and amortization expense amounts added back to net income in a statement of cash flow? these expenses do not affect cash, but were subtracted in the determination of net income. these expenses are recognized for accounting purposes, but they do not represent economic costs. these expenses affect investing activities, not operating activities. the cash disbursements for these accrued expenses will be made in a future period. Question 6 3 pts Identify the best way to evaluate a company's profitability. calculate the company's ROI for the most recent year. compare the company's ROI for the most recent year with the industry average ROI for the most recent year. review the trend of the company's ROI for several years. review the trend of working capital for several years. Question 7 3 pts How does a company increase financial leverage? use excess cash to purchase preferred stock for the treasury. try to increase its ROI by increasing asset turnover. raise additional capital by selling fixed interest rate long-term bonds. raise additional capital by selling common stock. Question 8 3 pts The comparison of activity measures of different companies is complicated by the fact that: the number of shares of common stock issued may be significantly different. only one of the companies may have preferred stock outstanding. dollar amounts of assets may be significantly different. different inventory cost flow assumptions may be used