Question 7 (1 point) Which of the following statements is true? 1. Earnings are cash flows. Therefore, reported earnings can be used in valuation without adjustments. II. While accounting convention treats operating leases as operating expenses, they are really financial expenses and need to be reclassified for valuation purposes. III. When R&D is capitalized, the return on equity will always decline. IV. The free cash flow to the firm (FCFF) will remain unchanged with R&D capitalization. II and IV only All the statements are true II, III and IV only I and Ill only I, II and IV only