Suppose RCS Enterprises had an additional $500,000 of depreciation expense in 2016, then the dollar impact of this change in depreciation expense on earnings (E), cashflow from operating activities (OCF) and on end-of-year cash balance (CB) will be, respectively:

	a.	E increase $395,000; OCF increase $105,000 and CB increase $105,000
	b.	E decrease $395,000, OCF decrease $105,000 and CB decrease $105,000
	c.	E decrease $395,000, OCF increase $105,000 and CB increase $105,000
	d.	E increase $395,000, OCF decrease $105,000 and CB increase $105,000

2.

Which of the following statements is FALSE?

	a.	It is important to keep in mind that good governance is value enhancing and so, in principle, is something investors in the firm should strive for.
	b.	Corporate governance is a system of checks and balances that trades off costs and benefits.
	c.	Because good governance is based upon a basic set of principles, like those detailed in the Cadbury Commission's findings, one should expect all firms to display similar governance structures.
	d.	The costs and benefits of a corporate governance system also depends on cultural norms.

Accumulated depreciation is considered a stock quantity that appears on the income statement.

True

False

In the U.S., the bankruptcy law that involves the reorganization or restructuring of the corporations (debtor) business affairs with the expectation that the business will return to normal is referred to as:

	a.	Chapter 13 bankruptcy
	b.	Chapter 11 bankruptcy
	c.	Chapter 7 bankruptcy
	d.	Chapter 1 bankruptcy