True or False?

1. Do borrowing interest charges increase a company's tax liability?

2. In a comparison of solutions with unequal lifetimes that uses the net present value method, the study period to be used should equal the lifetime of the solution with the longest lifetime.

3. FMAPIs (after-tax cash flows) show a negative value for capital investment expenditure (purchase of a machine), but depreciation is not included in these flows.

4. The business in 2020 generated sales proceeds of $1.5 million and interest income of $31,000. Operating expenses are $754,000 and depreciation is $148,000. The taxable income of the business in 2020 is approximately $200,000?

5. Earthmoving equipment (CCA = 30%), which had been paid for $155,000, was sold for $10,000 at the end of the fifth year of ownership. For a tax rate of 30%, the company had to pay following the sale of this equipment, additional tax of approximately $6,500.