Which of the Following Questions Is FALSE

question 7

Multiple Choice

Which of the following questions is FALSE?

• A)Net Working Capital = Current Assets - Current Liabilities.
• B)Because depreciation is not a cash flow,we do not include it in the cash flow forecast.
• C)Tax loss carrybacks allow corporations to take losses during the current year and use them to offset income in future years.
• D)Earnings are an accounting measure of firm performance.

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Definitions:

Shareholders

Individuals or entities that legally own one or more shares of stock in a joint-stock company or corporation.

Company

A legal entity formed by a group of individuals to engage in and operate a business—commercial or industrial—enterprise.

Par Value

The face value of a bond or stock as stated by the issuing company, which may differ from its market value.

Stock

Shares in the ownership of a company, representing a claim on part of the corporation's assets and earnings.