Which of the Following Statements Is FALSE

question 69

Multiple Choice

Which of the following statements is FALSE?

• A)Depreciation expenses have a positive impact on free cash flow.
• B)Free Cash Flow = (Revenues - Costs - Depreciation)× (1 - τc)- Capital Expenditures - ΔNWC + τc × Depreciation.
• C)The firm cannot use its earnings to buy goods,pay employees,fund new investments,or pay dividends to shareholders.
• D)The depreciation tax shield is the tax savings that results from the ability to deduct depreciation.

---

Definitions:

Polygraph Principle

The polygraph principle is based on detecting physiological changes in the body as a response to questions, used to infer truthfulness.

Spillover Effect

The spillover effect describes a situation where an event in one context or domain influences events in another context or domain, often extending the impact beyond the initial area.

James-Lange Theory

A theory suggesting emotions result from the perception of bodily reactions to external events.

Two-Factor Theory

A psychological theory, developed by Herzberg, that distinguishes between factors that cause job satisfaction (motivators) and factors that cause dissatisfaction (hygiene factors).