True or False questions.

1 T T Flotation costs are typically greater in the secondary market than in the primary market. 2 T F An income statement reports a firm's cumulative revenues and expenses from the inception of the firm through the income statement date. TF Investors expect to receive low returns from government-issued securities because the government is not expected to default on securities that it has issued. 4 TF Corporations and General Partnerships are typically the best legal forms of business since owners' liability is greatly reduced. 5 T F When making financial decisions, managers should always look at marginal, or incremental cash flows. 6 T F On the balance sheet, total assets must always equal total liabilities. The amount remaining is what is used to finance the firm through equity. 7 T F Investors will be indifferent between two investments if both investments have the same expected return