Review for Exam 1 - handout C1) Which of the following statements regarding the income statement is INCORRECT? A. The last or "bottom" line of the income statement shows a firm's net income. B. The income statement shows the flow of revenues and expenses generated by a firm between two dates C. The first line of an income statement lists the revenues from the sales of products or services. D. The income statement shows the cash flows and expenses at a given point in time. ple that a financial manager should follow when making decisions? A. Decisions should generate the greatest benefits for the firm B. Decisions should increase the value of the firm to its investors. C. De D. Decisions should be on bchalf of the firm's owners that give the greatest benefit to those owners, the firm's employees and the firm's other stakeholders. cisions should provide benefit to the firm without incurring costs. C3) Whenever a good trades in a competitive market, the determines the value of the good. A. price B. supply C. demand D. cost Prob. 1) Assume that you are 25 years old today, and that you are planning on retirement at age 65. You current salary is $40,000 and you expect your salary to increase at a rate of 3% per year as long as you work. To save for your retirement, you plan on making annual contributions to a retirement account. Your first contribution will be made on your 26th birthday and will be 7% of this year's salary Likewise, you expect to deposit 7% of your salary each year until you reach age 65 . Assume that the rate of interest is 8%, what is the present value (PV) (at age 25) of your retirement savings